Carmine Passero’s room in the Bronx is at the dead end of a windowless corridor that smells of bleach and cold turkey. As he hunches on the edge of his single bed, he looks gaunt and tired; one of the effects of HIV medicine is jaundice, and Passero’s skin is sallow and pitted with acne scars. A bedbug crawls across the sheets. The critters, he says, come with the room.

Passero has been HIV positive since 1989, and for years his viral load--the amount of HIV in his bloodstream--was undetectable. But then heroin got the better of him, and Passero started to sell the only commodity he had: his HIV medication. His viral load shot up, from less than 50 per ml of blood to 200,000.

City Limits Magazine


July/August 2005:
The People's Mayor?

Passero’s doctor saw what was happening and stopped writing his prescriptions. “If you don’t care about your health, why should I care?” his doctor told him. “When you’re ready to go back on them, let me know.”

Anyone who needs a fix badly enough to sell their meds knows all about the street corners in Hell’s Kitchen and Washington Heights, where dealers buy up prescription drugs for knock down prices. All Passero had to do to get money for a hit was take the subway a few stops to 59th and Ninth and his monthly supply of Kaletra, Sustiva, Videx and Viracept--anti-retrovirals that fight AIDS--was quickly converted to cash.

Passero contributed to a black market worth tens of millions of dollars annually in New York City, and hundreds of millions nationwide. In four recent cases across the city investigated by the New York State Attorney General’s Office, fraudulent claims for HIV medications cost Medicaid an estimated $2.8 million.

In another case this April, after an investigation that lasted close to a year and ranged across Utah, New York, New Jersey and California, a federal grand jury indicted six individuals and six businesses with mail fraud and drug diversion. The conspiracy involved more than 40 different types of drugs--many for the treatment of HIV and AIDS--and more than 80 pharmacies are part of an ongoing investigation of the distribution of the drugs.

“It’s having an unbelievable impact on the system,” says Ken Karp, a police officer investigator with the Attorney General’s Medicaid Fraud Control Unit and president of the New York State chapter of the National Association of Drug Diversion Investigators (NADDI). “It’s like keeping control on gold or money. It’s such a valuable commodity, there are people hijacking shipments at airports.”

On average, an HIV positive Medicaid recipient receives $2,000 worth of medication a month. But a single bottle of pills can have a retail value of $1,700, and one month’s supply of Serostim--a growth hormone sometimes prescribed to combat wasting from AIDS--is worth $5,000. On the street, depending on the type of drug and the state of the person selling it, a month’s supply of meds can fetch anywhere from $50 to $600.

In short, it is possible for someone on SSI, receiving $400 to $600 per month, to double his or her income in one shot. For a person trapped in the moment-to-moment crisis of homelessness and drug addiction, the immediate benefit of selling their meds often outweighs the abstract concept of extending their life.

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The dealers are known on the street as “the non-man,” or “non-control”--men dealing in noncontrolled substances, drugs that don’t get you high. They loiter on corners in Midtown and Washington Heights, waiting for addicts to turn up from all over New York. In seconds, they exchange wads of cash for plastic bags full of medication. The dealers pass the drugs on to crooked pharmacies that pay about $800 for $2,000 worth of medication. The next time a patient comes in with a prescription, instead of dispensing drugs bought at full cost from a supplier, the pharmacist hands over the street-bought meds, bills Medicaid for the full amount, and makes a fat profit. Sometimes the pharmacies simply buy a patient’s script and bill Medicaid for drugs that were never ordered.