CRO Employee Convicted for Stealing Merck Compounds

CRO Employee Convicted for Stealing Merck Compounds

June 5th, 2012 // 12:11 pm @ jmpickett

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Last month, a court in Shanghai convicted a former employee of WuXi PharmaTech, a contract research organization with operations in the US and China, of stealing samples of two different Merck compounds that were being tested in Chinese facilities. Xiao Hao was given an 18-month sentence, including six months that were suspended, and ordered to pay $45,000 in restitution, according to Chinese press reports .

The reports indicate that he stole small quantities of MK-3102, a GLP-1 inhibitor that is being developed to treat diabetes, and MK-5172, which is being developed to combat hepatitis C, both of which were in Phase II testing as of last fall, according to the Merck pipeline (read here). After the thefts, Xiao offered them for sale on the Internet, which Merck later discovered. The thefts took place last year, although were apparently not disclosed until the recent sentencing.

This is only the latest instance in which a drugmaker has experienced this sort of crime. Earlier this month, a former Sanofi chemist pleaded guilty to stealing trade secrets and selling compounds through another company in which she held an interest. The former chemist, Yuan Li, was sentenced to 18 months in prison, according to court documents (back story).

In a statement, WuXi described Xiao as a “junior employee” who acted by himself, and that the CRO has a “zero tolerance policy” for such activity. The CRO added that this was an “isolated” incident and the only known instance in 11 years of operations in which customer compounds were misappropriated. “We regret that one of our employees committed a crime on our premises,” WuXi ceo Ge Li says in a statement. “As in any company, there will always be the risk of damage caused by a determined criminal.”

To some, the theft may intensify a debate over the increased use of outsourcing in China. A growing reliance on companies in China have raised ongoing concerns over the reliability of the supply chain, especially in the wake of the Heparin scandal. Just last month, for instance, the State Food and Drug Administration found that hundreds of capsule makers were selling capsules with unsafe levels of chromium (read this). Then again, the Sanofi crime also illustrates that theft can happen anywhere.

A WuXi spokesman declined to comment on the Chinese press reports that identified Merck as the customer. “We prefer not to identify our customers,” he says, refusing to confirm or deny that Merck compounds were stolen. We asked Merck for a comment and will update you accordingly. [UPDATE: A Merck spokesman phoned us to say that the drugmaker supports the statement made by WuXi, but declined further comment.] Meanwhile, WuXi says it is reviewing security measures and upgrading employee training and oversight.