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Catch of the Week: Dozens of Fraudsters Sentenced in Multimillion Dollar Compounding Pharmacy Fraud

Posted  April 30, 2021

On Thursday, an Alabama District Court Judge sentenced dozens of defendants to prison for participating in a massive conspiracy to swindle insurers for medically unnecessary compound drugs. The defendants included company executives and managers, a prescriber, billers, and sales representatives associated with Northside Pharmacy, which was doing business as Global Compounding Pharmacy (Global).

According to the DOJ press release, Global employees and their conspirators engaged in an extensive pharmaceutical fraud campaign, which involved:

  • Directing Global employees to get unnecessary drugs for themselves, family members, and friends;
  • Adding unprescribed drugs to patient prescriptions;
  • Automatically refilling prescriptions regardless of patient need;
  • Waiving and discounting co-pays to encourage patients to get drugs they didn’t need;
  • Paying kickbacks to prescribers;
  • Billing for drugs without patients’ knowledge;
  • Lying to auditors after prescription drug administrators began policing Global’s conduct; and
  • Hiding improper claims by billing through affiliated pharmacies.

As a result of this fraudulent scheme, pharmacy benefits managers paid Global nearly $50 million in just two years.

Compound drugs are big business. The compounding pharmacies market was valued at more than $9 billion in 2020 and is projected to grow by another $5 billion over the next 30 years. In a statement related to this case, HHS Office of the Inspector General emphasized that fraud like this is a priority for Government enforcement:

This audacious multimillion-dollar fraud scheme posed a significant threat to the integrity of government healthcare programs at the expense of taxpayers. Working closely with our law enforcement partners, our agency will continue to protect Medicare and Medicaid from such costly scams.

Whistleblowers with information about pharmaceutical fraud may have a case under the False Claims Act and may be eligible to receive a whistleblower reward. If you would like more information or would like to speak to a member of the Constantine Cannon whistleblower lawyer team, please contact us for a confidential consultation.

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Tagged in: Anti-Kickback and Stark, Catch of the Week, Compounding Pharmacy Fraud, FCA Federal, Healthcare Fraud, Lack of Medical Necessity, Medical Billing Fraud, Pharma Fraud, Whistleblower Case,


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