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Pharma Fraud

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April 4, 2019

Jazz Pharmaceuticals (Jazz), Lundbeck LLC (Lundbeck), and Alexion Pharmaceuticals Inc. (Alexion) will pay a total of $122.6 million to settle allegations they violated the False Claims Act by having improper kickback schemes and for illegally paying Medicare and Civilian Health and Medical Program (ChampVA) copays for their own products. Under the terms of the settlement, Jazz agreed to pay $57 million, Lundbeck agreed to pay $52.6 million, and Alexion will be paying $13 million. DOJ  

March 19, 2019

Ademola O. Adebayo was sentenced to 10 years in prison for his role in a huge $100 million compounding pharmacy scheme that defrauded private insurance companies, Medicare and TRICARE. Adebayo was also ordered to pay $3.2 million in restitution and $1.4 million in forfeiture, and properties, cars and a yacht have been sequestered as part of the sentencing. After a four-day trial on January 11, Adebayo was convicted on counts of conspiracy to commit health care fraud and wire fraud, and conspiracy to commit money laundering. Eight other defendants have pleaded guilty in connection with the scheme. DOJ

March 11, 2019

Pfizer will pay $975,000 to the State of Oregon to resolve allegations that the pharmaceutical company distributed misleading advertising materials and coupons to state residents.  The materials advertised Pfizer's drugs the Flector Patch, Estring, Quillivant, and Quillichew, claiming that consumers would "pay no more than" specified amounts -- $15, $20, or $25.  In fact, consumers ended up paying more than advertised for the Pfizer drugs, despite the availability of cheaper generic alternatives.  A large portion of the settlement, $620,000, will go to Oregon nonprofits that provide medical care to low-income uninsured and underinsured, including migrant and seasonal farmworkers.  In addition, consumers who used the coupons will receive refunds.  OR AG

February 25, 2019

A Southern California pharmacy owner has been ordered to pay $1.5 million to Medicare after her conviction for one count of healthcare fraud and two counts of wire fraud. Tamar Tatarian, the owner of Akhtamar Phamarcy, was recently convicted of submitting false claims for prescription drugs never ordered from wholesalers or dispensed to beneficiaries. DOJ

February 22, 2019

The owner of New York Pharmacy, Inc., NYC Pharmacy Inc., and NY Healthfirst Pharmacy Inc., pharmacist Hin T. Wong, has pleaded guilty to criminal charges arising from millions of dollars in false billing to New York's Medicaid program for HIV drugs.  Wong billed Medicaid for medications that she never dispensed, a scheme disclosed by an investigation confirming that Wong's pharmacies did not purchase a sufficient inventory of medication from licensed drug wholesalers to account for the quantity of medication for which Wong’s pharmacies billed Medicaid and Medicaid Managed Care Organizations.  In addition, Wong paid kickbacks to individuals to bill for medications that were not, in fact, dispensed.  Under a related civil settlement, Wong will surrender over $3.6 million to the stateNY

February 22, 2019

Pharmaceutical manufacturer Lehigh Valley Technologies, Inc. will pay $4 million to resolve claims that it caused the submission of false claims through a scheme to avoid the payment of FDA new drug application (NDA) fees.  The FDA will waive such fees for a small business applicant submitting its first NDA, and had waived fees for Lehigh on an NDA in 2010.  Subsequently, in an effort to avoid $2 million in fees for a later NDA, Lehigh entered into agreements with two other companies to submit the NDAs and claim the fee exemptions, while Lehigh retained undisclosed control. USAO ED PA

Ohio Seeks to Recover Overcharges from OptumRx

Posted  02/21/19
Office building with logo for Optum
After a 2018 investigation by the Ohio Bureau of Workers Compensation (BWC) of its prescription drug spending, the BWC pharmacy program manager, John Hanna, concluded that "we were being hosed."  The BWC had contracted with OptumRx to act as a pharmacy benefits manager (PBM).  PBMs act as middlemen between drugmakers, pharmacies, and payors such as worker's compensation programs, Medicaid, Medicare, and other...

February 20, 2019

Hope Thomley of Hattiesburg, Mississippi, pleaded guilty for her role in a compounding pharmacy kickback scheme.  Thomley was the owner and operator of acompany that marketed for Advantage Pharmacy in Hattiesburg, and received 50% of Advantage's reimbursements.  Thomley admitted that she knew Advantage submitted false claims for payment to federal healthcare programs for medications that had not been prescribed by a doctor or were not medically necessary.  Between 2012 and 2016, health care benefit programs, including TRICARE, reimbursed Advantage Pharmacy and other pharmacies involved in the scheme at least $200 million. DOJ

February 19, 2019

Teva Pharmaceuticals Ltd. has reached a settlement agreement with the Federal Trade Commission resolving three separate antitrust lawsuits.  As part of the settlement, Teva agrees not to engage in so-called reverse-payment settlement agreements that can impede consumer access to generic drugs.  In such “pay-for-delay” settlements, the drug company patent-holder pays the generic drug manufacturer allegedly infringing its patent in exchange for the alleged infringer being in position to be awarded a six-month exclusive right to market the generic drug.  The settlement still requires court approval.  FTC

February 14, 2019

Compounding pharmacy Vital Life Institute LLC, formerly known as AgeVital Pharmacy LLC, will pay $775,000 to resolve claims that the company and its principals paid kickbacks to third-party marketing companies to solicit prospective patients, regardless of the patients' needs.  The investigation was initiated by the filing of a qui tam complaint under the False Claims Act by Manfred Knopf, who received unwanted compounded medications from AgeVital that were billed to Medicare.  Mr. Knopf will receive $139,500 as a whistleblower reward.  DOJ
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