Archive

April 21, 2022

Susan H. Poon, 57, will spend 70 months in federal prison, and will pay nearly $1.4 million in restitution for a scheme spanning over 3 years, and which resulted in approximately $2.2 million in fraudulent billings. Poon submitted prescriptions both with PII obtained at health fairs held by Costco and UPS, and by soliciting information from actual patients about their dependents—dependents whom Poon never saw or treated. Poon used the stolen PII to submit fraudulent durable medical equipment prescriptions to a DME manufacturer, who then unknowingly submitted false claims for reimbursement to a health insurer. In addition to the prison sentence and the owed restitution, Poon’s chiropractic license was revoked in 2019. USAO CDCA

April 13, 2022

Pharmacy owner Aleah Mohammed was sentenced to 78 months in prison for stealing more than $6.5 million from the government via her prescription fraud on Medicare and Medicaid drug plans. Mohammad submitted claims for drugs that weren’t dispensed, weren’t prescribed as claimed, were not medically necessary, or that were dispensed while the pharmacy was no longer registered with the State of New York. The proceeds were used by Mohammed and her family members to buy luxury vehicles, jewelry, and properties in Queens and Pocono Pines, Pennsylvania. USAO EDNY

March 7, 2022

Pharmaceutical company Mallinckrodt ARD LLC will pay $260 million to resolve allegations that it violated the False Claims Act in the sale and marketing of its drug H.P. Acthar Gel.  The government intervened in whistleblower actions alleging that Mallinckrodt and its predecessor Questcor Pharmaceuticals Inc. knowingly underpaid state Medicaid programs by improperly calculating amounts it owed under the Medicaid Drug Rebate Program, and unlawfully used a foundation as a conduit to subsidize co-payments.  With respect to the Medicaid rebate claims, which represent $234.7 million of the settlement, defendants were alleged to have calculated rebate amounts as if Acthar was a “new drug” first marketed in 2013, rather than a drug that had been approved since 1952.  By using 2013 for Acthar’s Base Date Average Manufacturer Price (AMP), the company ignored price increases prior to 2013 and fraudulently reduced Acthar drug rebates.  With respect to the copayment fraud claims, which represent $26.3 million of the settlement, defendants were alleged to have violated the Anti-Kickback Statute by subsidizing copayments through payments to three funds that Mallinckrodt had a foundation set up to induce Medicare-reimbursed purchases of Acthar, using the subsidies to counteract doctor and patient concerns about the drug’s high cost.  The whistleblower in the Medicaid rebate case, James Landolt will receive an award of $24.7 million, representing 20% of the $123.6 million federal share of that settlement; the relator’s share for the state share of the settlement was not announced.  The whistleblowers in the copayment case, Charles Strunck and Lisa Pratta, will receive an award of $4.9 million, representing 19% of that settlement.  The settlement includes a five-year corporate integrity agreement (CIA) with monitoring provisions.  DOJ; USAO MA; USAO EDPA

January 28, 2022

Hayat Pharmacy agreed to pay over $2 Million to resolve allegations that it submitted false claims to Medicare and Medicaid for certain prescription medications from its 23 locations. The government alleged Hayat Pharmacy submitted false claims for two prescription medications, a topical cream consisting of iodoquinol, hydrocortisone, and aloe, and a multivitamin with the trade name Azesco.  Hayat Pharmacy allegedly switched Medicaid and Medicare patients from lower cost medications to the higher cost medications without any medical need and/or without a valid prescription. As part of the settlement, Hayat Pharmacy agreed to conduct annual training concerning waste, fraud and abuse, and compliance with rules concerning medication switches. USAO WI

January 6, 2022

Centene Corporation will pay $21.15 million to resolve claims that the pharmacy benefit manager inaccurately reported its services and costs to New Hampshire’s Medicaid Care Management Program, resulting in overcharges to the state.  NH (related settlements with Ohio, Mississippi, and Kansas)

December 8, 2021

Pharmacist Riad “Ray” Zahr and two pharmacies he owned and operated, Plymouth Towne Care Pharmacy Inc. and Shaska Pharmacy LLC will pay $1 million to resolve a lawsuit initiated by a whistleblower alleging that the pharmacies submitted false claims for Evzio, a naloxone hydrochloride product used for the rapid reversal of an opioid overdose.  The government alleged that the claims included false and misleading prior authorization requests, including forged physician authorizations.  In addition, defendants dispensed Evzio without collecting or attempting to collect co-payments. DOJ; USAO MA

December 7, 2021

Vyera Pharmaceuticals, LLC and its parent company Phoenixus AG will pay up to $40 million and have agreed to make its drug Daraprim available to any potential generic competitor at list price to resolve claims of anticompetitive conduct.  The federal government and state governments alleged that Vyera principals Martin Shkreli and Kevin Mulleady enacted a plan to acquire life-saving toxoplasmosis drug, Daraprim, and dramatically raise its list price by 400% while engaging in conduct to prevent generic competition and protect their monopolistic pricing.  The resolution also bars Mulleady from working in the pharmaceutical industry for seven years; claims against Shkreli are continuing.  FTC; CA; NY; NC; VA

December 6, 2021

Pharmacy benefit manager Centene Corp. will pay $27.6 million to the State of Kansas to resolve allegations that it failed to satisfy its obligation to represent the state’s best interests in negotiations with companies that supply drugs to the state Medicaid program, failed to accurately report discounts it received from CVS-Caremark on certain retail pharmacy claims, and artificially inflated dispensing-fee amounts reported to state regulators.  The state alleged that Centene used an opaque reporting system that made it difficult for the state to determine the nature and appropriateness of certain pharmacy transactions.  As part of the settlement, Centene also agreed to change certain business practices to ensure greater transparency.  KS

November 9, 2021

Kaléo, Inc., a pharmaceutical manufacturer in Virginia, has agreed to pay $12.7 million to resolve a whistleblower’s allegations that it violated the Anti-Kickback Statute and False Claims Act in claims submitted to Medicare, TRICARE, and the Federal Employees Health Benefits Program.  Between 2017 and 2020, kaléo allegedly provided kickbacks to physicians and their staff to induce and reward them for prescribing Evzio, a higher-priced version of a drug used to reverse opioid overdoses and which often requires prior authorization.  Kaléo also allegedly directed pharmacies to submit false prior authorizations and dispense Evzio without collecting required co-pays.  USAO MA

October 1, 2021

Pharmaceutical manufacturers Taro Pharmaceuticals USA, Inc., Sandoz Inc. and Apotex Corporation have agreed to pay a total of $447.2 million to resolve alleged violations of the False Claims Act and Anti-Kickback Statute arising from unlawful compensation received through arrangements on price, supply and allocation of customers with other pharmaceutical manufacturers of various generic drugs.  In connection with the FCA settlements, Taro will pay $213.2 million, Sandoz will pay $185 million, and Apotex will pay $49 million.  The civil settlements are in addition to previous deferred prosecution agreements resolving related criminal charges, pursuant to which Taro paid a criminal penalty of $205.6 million, Sandoz paid a criminal penalty of $195 million, and Apotex paid a criminal penalty of $24.1 million.  DOJ