Challenging Harrell ‘A Lot Like Playing with Fire’

February 8, 2013

Investigative Reports

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DrugsHigh-ranking officials with two state pharmacy organizations in 2010 expressed concerns then that S.C. House Speaker Bobby Harrell was using his legislative position to help his pharmaceutical company, according to emails obtained this week by The Nerve.

Their concerns stemmed from an Oct. 20, 2010, letter that Harrell, who is president of Charleston-based Palmetto State Pharmaceuticals, sent to hospitals in the state seeking to establish his pharmaceutical dispensing business, which involves repackaging of drugs, in their emergency rooms.

The first line of that letter reads, “I am writing you today not in the capacity as Speaker of the House of South Carolina, but as a business owner.”

“Bobby Harrell has been told that this type of practice is not in the best interest of the patients and the (S.C.) Board of Pharmacy said it was against the law since no physician was actually overseeing the dispensing,” Don Ray, then a member of South Carolina Pharmacy Association’s board of directors, wrote to fellow board members and association staff on Nov. 8, 2010.

“Mr. Harrell said if that was the case then he would change the law,” Ray, who served as the association’s president in 2009, according to association records, continued. “For the most part, that ended the discussion.”

In a Nov. 4, 2010, email to then-pharmacy association President Wayne Weart, Lewis McKelvey, then-president of the South Carolina Society of Health-System Pharmacists, said he wanted to share Harrell’s letter with the leadership of Weart’s group to, among other things, “consider an ethics complaint against Mr. Harrell for the blatant abuse of his ‘capacity as Speaker of the House of South Carolina’ to promote his business interests.”

McKelvey, an assistant dean at the Presbyterian College School of Pharmacy in Clinton, declined comment when contacted this week by The Nerve. Efforts to reach Ray were unsuccessful.

Other officials with the two pharmacy organizations did not respond to written messages Thursday fromThe Nerve seeking comment.

The emails from Ray and McKelvey were part of a 130-page package of documents obtained Wednesday by The Nerve from the S.C. Department of Labor, Licensing and Regulation (LLR) under the state Freedom of Information Act.

The Nerve on Thursday asked LLR spokeswoman Lesia Kudelka about whether her agency believed that Harrell had attempted in 2010 or any other time to use his legislative position to help his business. Kudelka in a written response didn’t directly answer the question, saying only, “Our responsibility as a licensing agency is to follow the requirements for licensure as set forth in law, and to treat all licensees and potential licensees fairly and equally.”

As has been their longstanding practice with The Nerve, neither Harrell, R-Charleston, nor his spokesman, Greg Foster, responded Thursday to written and phone messages seeking comment on the emails and related matters.

The Nerve on Jan. 22 first revealed details of Harrell’s dealings with the S.C. Board of Pharmacy, which regulates pharmacists and pharmaceutical businesses, on matters involving his pharmaceutical company, including the 2010 letter he wrote to hospitals.

Those documents were referred to in an earlier hearing on Jan. 22 before the S.C. Commission on Ethics Reform during which Ashley Landess, president of the South Carolina Policy Council – The Nerve’sparent organization – said the Policy Council was considering filing a formal ethics complaint against Harrell with the state House Ethics Committee.

Besides Harrell’s dealings with the Pharmacy Board, Landess also raised questions about his reimbursement of campaign funds for certain expenses related to the use of his private airplane, and his appointment of his brother, John Harrell, to a 10-member state panel that nominates judicial candidates for election by the General Assembly.

Section 8-13-700 of the S.C. Code of Laws bans public officials from using their office to “obtain an economic interest for himself, a family member, an individual with whom he is associated, or a business with which he is associated.”

Harrell, the House speaker since 2005 and who was elected to the House in 1992, has denied publicly that he has done anything wrong, and he has not been charged with any criminal or administrative violations.

Harrell’s ‘Solicitation’ Letter

In his 2010 letter to hospitals, Harrell said his company, which also goes by the name of PrimaryRX, offers a “comprehensive point of care pharmaceutical dispensing program which makes it practical, affordable, and profitable for clinics and private practices.”

“Having worked with hundreds of physicians and practices across the country in a variety of clinical settings, it was a natural progression for us to expand our dispensing program to work within a Hospital’s Emergency Room,” Harrell wrote. LLR records provided Wednesday to The Nerve show that as of last April, Harrell’s company was licensed in Florida and Georgia in addition to South Carolina.

Citing an unnamed national study, Harrell in his 2010 letter said “three out of four” patients in the study said they would “have their prescriptions filled by a physician vs. going to a pharmacy.”

But Patricia Powell, an assistant professor at the University of South Carolina’s College of Pharmacy and a South Carolina Pharmacy Association board member, disputed the study in a Nov. 5, 2010, email to association board members and staff, noting that the study was funded and conducted by a company similar to Harrell’s.

“All very valid concerns and observations,” Carmelo Cinqueonce, the pharmacy association’s then-executive director, responded in an email to Powell about an hour later. “We’ve been aware of Speaker Harrell’s business for sometime (sic) and every few years the issue pops up … and no (,) there is no pharmacist involvement in the process.”

Cinqueonce, now executive director of the Minnesota Dental Association, declined comment when contacted Thursday by The Nerve.

As it turned out, Cinqueonce in a Nov. 16, 2010, email informed his Pharmacy Association board that then-S.C. Board of Pharmacy Chairman Bobby Bradham presented Harrell’s “solicitation” letter during a Board of Pharmacy meeting earlier that day. Citing a legal opinion from Sharon Dantzler, identified in the email as the Board of Pharmacy’s legal counsel, Cinqueonce said until a hospital “acts on and attempts to implement the proposed business model (,) LLR and or the Board (of Pharmacy) can’t act.”

Kudelka, the LLR spokeswoman, said Thursday that Board of Pharmacy staffers are “not aware of anyone implementing this business model,” adding, “No one has come before the Board asking for approval for such a business model.”

The Nerve’s Jan. 22 story cited an email last Feb. 24 from David Grimm, Harrell’s nephew and CEO of Palmetto State Pharmaceuticals, according to records, in which he said Harrell in 2007 met with Dantzler on another matter related to their business and after “multiple conversations,” she “provided a response to our company in a letter clarifying LLR’s position.”

As the House speaker, Harrell has the authority to make most committee assignments, including appointing members to the House Ways and Means Committee, which writes the first legislative draft of the annual state budget for state agencies, including LLR.

Early Interference

The Nerve’s Jan. 22 story also cited a May 25, 2006, email from Bradham to Lee Ann Bundrick, the Board of Pharmacy’s current administrator, in which Bradham expressed concerns that participating in a conference call on a permit matter involving Harrell’s business was not a routine procedure.

“By conversing with Bobby Harrell, we were already making this ‘different’ since he was adamant in his conversation that he wanted this enterprise to be treated the same as any other operation and not any exceptions be made because of ‘who’ he was!” wrote Bradham, then a clinical assistant professor at the Medical University of South Carolina’s College of Pharmacy in Charleston.

In another email two days earlier labeled “High Priority,” Bradham told fellow Board of Pharmacy members that Harrell and a State House assistant were “very upset” that Harrell’s business needed a federal Food and Drug Administration repackaging permit, and that Harrell’s assistant had scheduled the conference call.

Efforts this week to reach Bradham, who no longer serves on the Board of Pharmacy, were unsuccessful.

In a handwritten note on his official speaker letterhead on May 2, 2006, Harrell asked for “urgent attention to this request” for a “new non-dispensing drug outlet permit.”

In another handwritten note around the same time, a person who signed it as “SY” – presumably Board of Pharmacy manager Sheila Young, according to other documents – informed a staffer identified only as “Cle” – presumably staff inspector Clelia Sanders, according to other documents – that a consulting pharmacist for Harrell’s company would be in contact with him about Harrell’s facility.

“It needs to be done ASAP after (the consulting pharmacist) calls, per Mr. Bryant because this is the ‘speaker of the house’ Bobby Harrell,” according to the note, which was included in the package of documents provided Wednesday to The Nerve.

Also included with the documents was a fax cover sheet from the House speaker’s office on May 26, 2006, in which Harrell and Grimm informed Bradham in a handwritten note that they could complete certain FDA forms “once we have our BOP (Board of Pharmacy) certification.”

Standing Up to Bobby

In the 2010 emails, South Carolina Pharmacy Association board members openly worried about challenging Harrell’s business plans.

“Will it jeopardize our ability to introduce and pass legislation this session if we are also fighting the Speaker of the House?” Patricia Powell wrote in her Nov. 5, 2010, email. “Also, playing devil’s advocate, how are Representative Harrell’s actions any different than Representative Spires sponsoring legislation that will help increase business for community pharmacy (i.e. flu shots)?

“I think we need to be very cautious how we approach this issue because the last thing I want to happen is for it to affect our legislative agenda.”

Then-board of directors member Don Ray echoed Powell’s concerns.

“If we press too hard, he could certainly hurt us in other legislative ways,” Ray wrote in his Nov. 8, 2010, email, six days after the November general election in which Nikki Haley was elected governor.

“People like Bobby Harrell and (Sen.) Hugh Leatherman (R-Florence) are exactly what is wrong with the legislative process in SC,” Ray continued. “They are precisely what Nikki Haley is against and that is why she has pushback from some of the Republicans.”

In the end, though, Ray conceded: “I think the (business) practice (of Harrell) should be stopped, but who is going to stand up to the Speaker of the House and win? It’s a lot like playing with fire!”

Reach Brundrett at (803) 254-4411 or rick@thenerve.org. Follow him on Twitter @thenerve_rick. Follow The Nerve on Facebook and on Twitter @thenervesc.