Pharma Fraud

February 15, 2018

New York announced the arrest and indictment of, as well as a civil asset forfeiture action against, Arkady Goldin, 39, of Brooklyn, and Value Pharmacy, Inc. ("Value"), for allegedly defrauding the New York State Medicaid program out of millions of dollars. Goldin, an owner of Value, is charged with Grand Larceny in the First Degree and other crimes for having allegedly paid kickbacks to a hospital employee for the referral of prescriptions for costly cancer medications. Additionally, prosecutors allege that Value billed Medicaid for over a million dollars of prescription medication it did not have in stock to dispense. The Attorney General’s Medicaid Fraud Control Unit ("MFCU"), also filed an asset forfeiture and civil recovery action against Goldin, Value, and Goldin’s co-owners seeking over $8.7 million in damages and penalties, alleging that Value’s owners made millions from these schemes that they funneled through shell companies to purchase personal expenses such as travel, luxury cars, and a high-end country club membership. NY

January 19, 2018

A federal court in New Jersey imposed a $5 million civil penalty and entered a permanent injunction against Dr. Reddy’s Laboratories Inc., the North American subsidiary of Indian pharmaceutical company Dr. Reddy’s Laboratories Limited, for failing to comply with the Poison Prevention Packaging Act (PPPA) and the Consumer Product Safety Act. Specifically, the company distributed household oral prescription drugs in blister packs that were not child resistant as required by the PPPA and despite being warned by its own employees that the blister packs had not been tested for PPPA compliance and that certain blister packs were expected to fail the PPPA’s child test protocol. DOJ

January 4, 2018

Kmart Corporation agreed to a $1 million settlement with the California Department of Insurance to resolve a whistleblower claim brought under the California Insurance Fraud Prevention Act.  KMart contracted with insurance companies to be reimbursed at a rate based on the company's charges to cash-paying customers, but was alleged to have submitted claims to private insurers in amounts that exceeded the agreed-upon rates.  CA

December 22, 2017

Kmart Corporation, a wholly owned subsidiary of Sears Holdings Corporation, agreed to pay $32.3 million to settle allegations that Kmart violated the False Claims Act through Kmart pharmacies offering discounted generic drug prices to cash-paying customers through various club programs without disclosing those prices when reporting to federal health programs its usual and customary prices. Usual and customary pricing is typically used by Medicare and the other federal health programs to establish reimbursement rates. The settlement is a part of a global $59 million settlement that includes a resolution of state Medicaid and insurance claims against Kmart. The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by James Garbe. He will receive a whistleblower award of $9.3 million. DOJ

December 20, 2017

Maryland-based pharmaceutical company United Therapeutics Corporation agreed to pay $210 million to resolve claims it violated the False Claims Act and Anti-Kickback Statute by using a foundation as a conduit to pay the copays of Medicare patients taking the company's pulmonary arterial hypertension drugs. The government charged that covering the copays was prohibited remuneration used to induce Medicare patients to purchase the company’s products. DOJ

December 18, 2017

Florida-based pharmacy Glades Drugs, Inc. agreed to pay $300,000 to settle allegations of violating the False Claims Act by waiving or failing to collect required copayments from Medicare and TRICARE beneficiaries. The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by former Glades pharmacy technician Elvens Vertus. Vertus will receive a yet-to-be-determined whistleblower award from the proceeds of the government's recovery. DOJ (SDFL)