Candidate with ad criticizing Chinese drug manufacturing says she had no role in husband’s business that misbranded Chinese drugs

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A screen capture from a Diana Harshbarger ad calling for a return of medical manufacturing from China to the U.S.

KINGSPORT, Tenn. (WJHL) – Republican First District Congressional candidate Diana Harshbarger’s website says reliance “on foreign powers like China for pharmaceuticals is detrimental to Americans’ well being and rewards bad actors.”

The Kingsport pharmacists’s new campaign ad calls for bringing medical manufacturing back to the U.S. But Chinese medical manufacturing hit close to home for Harshbarger in 2013, when her husband and fellow pharmacist Robert pleaded guilty in federal court to misbranding drugs and healthcare fraud.

Congressional candidate Diana Harshbarger

Those drugs, administered to kidney dialysis patients in Kansas to help replenish their iron stores, were from China. They were misbranded as being from a New York company that made the only FDA-approved drug for such treatment at that tine.

Robert Harsbharger was ordered to pay more than $800,000 restitution and imprisoned following a guilty plea in Kansas federal court.

Diana Harshbarger said in a statement Wednesday she had nothing to do with Robert Harshbarger’s business, American Inhalation Medication Specialists, Inc. (AIMS). Her campaign said she didn’t have time to go on camera Wednesday.

“It didn’t impact me at all because I had nothing to do with it,” Harshbarger said of the experience and whether it changed her business approach after 2013.

A Kansas federal prosecutor’s work led to a 2012 indictment of Robert Harshbarger for misbranding drugs and health care fraud perpetrated through AIMS.

Harshbarger’s “America First” section bemoans the human cost of drug shortages and says relying on China for drug supplies must end.

“I have never purchased any medications for my business that were not supplied by a U.S. manufacturer,” Harshbarger said Wednesday. “I have used Cardinal Health for purchases for over 30 years.”

Diana Harshbarger runs Custom Compounding Centers of America. A campaign spokesperson, Kristin Davison, said Harshbarger never was on the payroll for AIMS, though she became its registered agent in mid-2013. Davison said AIMS didn’t do any further business after the federal case, though it didn’t officially de-incorporate until 2017.

State records show that Robert Harshbarger was the registered agent for Custom Compounding Centers of America from its inception in 1990 until September 2012, when Diana became the registered agent. The same was true for Custom Compounding Centers of America II.

Both those businesses remain active.

Harshbarger said her husband’s past did not give her any pause in mentioning Chinese drugs in her campaign.

“It’s the reason I ran the commercial,” she said. “I’ve made the statement many times over the last 25 years, that over 85-90% of the drugs supplied to the United States come from China….

“China is the problem. I’ve seen it firsthand. We finally have a president who wants to bring manufacturing jobs back and put America first. My opponents — who collectively have over 80 years of experience playing political tricks and tried to smear me with this story — evidently don’t understand these issues. If they were to go to Washington, they wouldn’t understand how to fix them there either.”

Qingdao Shengbang Chemical Co.

AIMS was named in the November 2012 Kansas indictment of Robert Harshbarger.

The indictment alleged that through AIMS, Robert Harshbarger supplied Kansas Dialysis with iron sucrose labeled as FDA-approved Venofer, which was manufactured by American Regent of Shirley, N.Y. Venofer was the only FDA-approved iron sucrose drug for pre-dialysis and post-dialysis treatment.

Harshbarger had actually purchased iron sucrose from other sources, including Qingdao Shengband Chemical Co. of Qingdao, China. Shipments of Chinese-manufactured iron sucrose, the indictment alleged, lasted from at least September 2004 through June 2009 and also came from Shanghai Rory Fine Chemicals of Shanghai.

After a failed attempt to have the case transferred from Kansas to the Eastern District of Tennessee in Greeneville, Robert Harshbarger eventually pleaded guilty to two of seven counts.

Evidence included a recorded phone call from a Kansas Dialysis employee “under the guise that Kansas Dialysis was being questioned by an American Regent sales representative about Kansas Dialysis’s source for their Venofer.”

Invoices from AIMS indicated the syringes sent to Kansas Dialysis were filled with Venofer. Kansas Dialysis in turn billed health care benefit programs, including Medicare, Medicaid, the VA, TriCare (defense department insurance) and Blue Cross/Blue Shield.

The indictment revealed $845,232 in amounts billed to those providers. It alleged Robert Harshbarger “exposed dialysis patients to unknown and unreasonable risks, and caused them to receive and pay for misbranded drugs.”

Iron sucrose drugs help replenish the body’s iron stores in adult patients who have iron deficiency anemia associated with chronic kidney disease.

The health care fraud count stated, “had the health care benefit programs known that its beneficiaries were receiving misbranded drugs, they would not have paid for them.”

In the end, Robert Harshbarger agreed to a 48-month federal prison sentence, restitution of $845,504, a $25,000 fine and asset forfeiture of an additional $425,000.

Diana Harshbarger replaced Robert Harshbarger as AIMS’ registered agent with the submission of the company’s 2013 annual report, according to Tennessee Secretary of State’s office records.

AIMS stayed in business until Aug. 8, 2018, changing its principal address from 109 Jack White Drive, where Premier Pharmacy is also located, to 1242 Ridgetop Trail in Kingsport with its 2016 annual report filing.

Sticking with criticism of China

Diana Harshbarger is not alone in her criticism of America’s reliance on China as a supplier of generic drugs. A September 2019 article in Healthline, an online publication, cited a high-level employee of the agency that provides prescription drugs to U.S. military members.

“The national security risks of increased Chinese dominance of the global API (active pharmaceutical ingredients) market cannot be overstated,” Healthline quoted Christopher Priest as saying. Priest delivered the remarks at an August 2019 U.S.-China advisory panel.

Another source in the article, Southern Methodist University professor David Jacobson, said China was playing the long game while U.S. companies and consumers had been focusing on finding the lowest-cost providers. Gaining strategic control over critical supplies of drugs and drug companies (including presumably Cardinal Health, which had its own huge Chinese operation until selling it in 2015), “keeps the United States at China’s mercy in the event of a health crisis, even if China doesn’t have ill intent,” the article paraphrased Jacobson as saying.

Diana Harshbarger at work in her Kingsport compounding business.

He told Healthline that “bright-thinking U.S.-based healthcare communities,” are working to bring back generic manufacturing “because of the danger of being so dependent on a rival for our well-being.”

In fact, such concern wasn’t a partisan issue. Two California Democratic representatives, Adam Schiff and Anna Eshoo, wrote an opinion piece for the Washington Post last September in which they warned against Chinese dominance in the generic drugs market.

“If relations decline further, the Chinese government could look for “pressure points” where it can wield outsize leverage or force a change of U.S. policy,” the opinion read in part. “Pharmaceutical ingredients could be such a vulnerability: By cutting back their supply or manipulating prices, China could cause pharmaceutical costs to surge. Or worse, we could experience shortages.”

Diana Harshbarger said despite the past actions affiliated with Robert Harshbarger’s business, she is a candidate voters can trust. If people want someone “who’s an outsider who will hold China accountable and who will put Americans back to work, not the Chinese, they will vote for me.”

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