Pharma Fraud
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October 5, 2018
Partner Gordon Schnell was quoted in the Law360 article, Outside Whistleblowers Key To $625M Amerisource FCA Deal. Click here to read the article.October 1, 2018
Pharmaceutical distributor AmerisourceBergen Corporation will pay $625 million to the federal government and 43 states to settle claims that between 2001 and 2014 a pre-filled syringe program at one of its subsidiaries, Medical Initiatives, Inc., violated federal law. Despite lacking the proper licensing and registration, MII opened FDA-approved sterile vials of oncology drugs, and in a non-sterile environment, pooled the medicine and transfered it into non-FDA approved pre-filled syringes which were then sold to oncology practices and physicians. This practice allowed Amerisource to capture the "overfill" in the original FDA-approved sterile vials and produce a larger number of pre-filled syringes. AmerisourceBergen also resolved claims that it provided unlawful kickbacks to physicians to induce them to purchase pre-filled syringes rather than vials. The settlement resolved three qui tam actions initiated by whistleblowers Michael Mullen, Daniel Sypula, Kelly Hodge, and Omni Healthcare, Inc.; a payment of over $93 million will be made to relators. Previously, in September, 2017, AmerisourceBergen Specialty Group pleaded guilty to illegally distributing misbranded drugs and agreed to pay $260 million in criminal fines and forfeitures. USAO E.D.N.Y.; NYSeptember 24, 2018
The owner and operator of several Superdrugs pharmacies in Queens, New York, was charged with submitting false claims to Medicare Part D and Medicaid for prescription drugs that were not dispensed, were not prescribed as claimed, or not medically necessary. The pharmacies allegedly received $7.9 million from Medicare and Medicaid based on the fraudulent claims. DOJWhat Would You Do? Disgrace and Conflicts in Medical Clinical Studies
Posted 09/18/18
September 17, 2018
In the largest healthcare fraud case ever to come out of Mississippi, the co-owner of two Mississippi-based compounding pharmacies, Marco Bisa Hawkins Moran, has pleaded guilty to defrauding TRICARE of more than $22 million. As part of the fraud, Moran and others allegedly paid kickbacks to doctors and marketers to prescribe drugs for beneficiaries covered by TRICARE and other lucrative health benefit programs. Additionally, they allegedly selected formulas meant to maximize profits instead of benefit individuals, and submitted fraudulent reimbursement claims to TRICARE. The case spanned multiple states across the country, including California, Tennessee, Arkansas, and Connecticut, with twelve people charged and nine convicted so far. USAO SDMSSeptember 13, 2018
One of the owners of an unnamed compounded drug marketing company has pleaded guilty to defrauding a state employee health benefit plan. According to the complaint, over the course of a year, Robert Madonna and others bribed a number of state employees to obtain prescriptions for medically unnecessary but expensive compounded drugs, including vitamins and creams to manage fungus, pain, and scars. The alleged fraud caused more than $2 million in losses to the New Jersey State Health Benefits Plan. Madonna will now pay $2,092,791 in restitution and be sentenced early next year to a possible maximum of 10 years in prison and a $250,000 fine. USAO NJSeptember 11, 2018
Through a tip by Connecticut State Comptroller, Kevin Lembo, a Florida-based compounding pharmacy, Assured, Rx, along with multiple individuals—many of them former and current Connecticut state government employees—have been sued by the State of Connecticut for alleged violations of the Connecticut False Claims Act. The pharmacy is accused of paying kickbacks to co-defendants Nicholas and Lisette Maulucci, who then paid other individuals to file reimbursement claims from a state employee health plan for expensive compound drugs manufactured by Assured, Rx. Through their actions, the Mauluccis allegedly received kickbacks totaling upward of $2.6 million, and cost the Connecticut Pharmacy Benefit Plan approximately $10.9 million. CT AGThird Circuit Clarifies the Public Disclosure Bar in United States ex rel. Silver v. PharMerica
Posted 09/7/18
Whistleblower Marc Silver secured a victory from the Third Circuit on September 4, 2018, which held that his action was not blocked by the “public disclosure bar” of the False Claims Act, reversing a lower court that had dismissed his action. The Third Circuit’s opinion appropriately recognizes that a whistleblower can use non-public information as a bridge between public information and allegations of fraud,...