Pharma Fraud

September 1, 2015

Discount department store chain KMART Corp., which operates approximately 780 in-store pharmacies throughout the US, agreed to pay $1.4 million to resolve allegations it violated the False Claims Act by using drug manufacturer coupons and gasoline discounts as improper Medicare beneficiary inducements.  According to the government, Kmart improperly influenced the decisions of Medicare beneficiaries to bring their prescriptions to Kmart pharmacies by permitting them to use drug manufacturer coupons to reduce or eliminate prescription co-pays that they otherwise would be obligated to pay, and by also offering them varying levels of discounts on the purchase of gasoline at participating gas stations.  The allegations originated in a whistleblower lawsuit filed by former Kmart pharmacist Joshua Leighr under the qui tam provisions of the False Claims Act.  Leighr will receive a whistleblower award of approximately $248,500.  DOJ

August 7, 2015

Tamara Esponda, owner of Miami-based Biomax Pharmacy, pleaded guilty to submitting almost $1.6 million in fraudulent claims to Medicare.  Specifically, Esponda admitted that Biomax Pharmacy submitted fraudulent claims to Medicare for prescription drugs not prescribed by physicians, not medically necessary, not purchased by Biomax Pharmacy and not provided to Medicare beneficiaries.  DOJ

August 3, 2015

Rouzbeh Javaherian, owner of Los Angeles-based Westaid Pharmacy and Medical Supply, was sentenced to 18 months in prison and to pay $644,060 in restitution for his role in a fraud scheme involving the Medicare Part D prescription drug program.  Specifically, Javaherian paid illegal cash kickbacks to Medicare beneficiaries to induce them to submit their prescriptions to Westaid.  Javaherian then filled some of those prescriptions, but also submitted false claims to Medicare Part D plan sponsors for prescriptions that he did not actually fill.  DOJ

July 24, 2015

California oncologist Dr. Neelesh Bangalore has paid $736,000 to settle allegations that he improperly billed Medicare, Medicaid, and Tricare for certain chemotherapy drugs purchased from an unlicensed foreign pharmaceutical distributor, Warwick Healthcare Solutions Inc., also known as Richards Pharma, a former United Kingdom-based drug distributer that did not have a license to distribute drugs in the United States.  DOJ

July 23, 2015

Evelio Fernandez Penaranda, owner of Miami-area pharmacy Naranja Pharmacy Inc., pleaded guilty for his role in the submission of more than $1.8 million in fraudulent claims to Medicare.  Specifically, Penaranda admitted submitting fraudulent claims to Medicare for prescription drugs not prescribed by physicians, not medically necessary and not provided to Medicare beneficiaries.  DOJ

July 1, 2015

The U.S. District Court for the District of New Jersey entered a consent decree of permanent injunction against Acino Products LLC and its president, Ravi Deshpande, to prevent the distribution of unapproved and misbranded drugs.  Specifically, the injunction involves hydrocortisone acetate suppositories under the brand names Rectacort-HC and GRx HiCort 25 and government charges these suppositories are not approved by the FDA and are misbranded because they do not bear adequate directions for use as required by law.  DOJ

May 20, 2015

Pharmacy benefits manager Medco Health Solutions Inc., a wholly-owned subsidiary of the pharmacy benefit manager Express Scripts Holding Company, agreed to pay $7.9 million to settle allegations it engaged in a kickback scheme in violation of the False Claims Act.  According to the government, Medco solicited remuneration from AstraZeneca in exchange for identifying Nexium as the “sole and exclusive” proton pump inhibitor on certain of Medco’s prescription drug lists known as formularies.  AstraZeneca allegedly compensated Medco in the form of reduced prices on the following AstraZeneca drugs: Prilosec, Toprol XL and Plendil.  In January 2015, the government reached a $7.9 million settlement with AstraZeneca to resolve kickback allegations arising out of the same conduct.  The allegations first arose in a whistleblower lawsuit filed by former AstraZeneca employees Paul DiMattia and F. Folger Tuggle under the qui tam provisions of the False Claims Act.  They will receive a whistleblower reward from the recovery that has yet to be determined.  DOJ

May 14, 2015

PharMerica Corporation, an organization of long-term care pharmacies that dispense medications to residents of nursing homes and skilled nursing facilities across the country, agreed to pay $31.5 million to settle charges it violated the Controlled Substances Act by dispensing Schedule II controlled drugs without a valid prescription and violated the False Claims Act by submitting false claims to Medicare for these improperly dispensed drugs.  The government’s allegations against PharMerica arose out of whistleblower lawsuit brought by Jennifer Denk, a pharmacist formerly employed by PharMerica, under the qui tam provisions of the False Claims Act.  Ms. Denk will receive a whistleblower award of $4.3 million.  Whistleblower Insider

May 1, 2015

Accredo Health Group, a unit of Express Scripts Holding Co., agreed to pay $60 million to settle False Claims Act and Anti-Kickback Statute charges that the company participated in a kickback scheme with Novartis Pharmaceuticals Corp. involving the prescription drug Exjade.  According to the government, Novartis provided kickbacks, in the form of patient referrals and related benefits, to Accredo in exchange for Accredo recommending refills to Exjade patients.  The government also intervened in a whistleblower lawsuit against Novartis for the same alleged scheme.  The government claims defendants allegedly understated the serious and potentially life-threatening side effects of Exjade when promoting the drug’s benefits to patients. FBI

March 16, 2015

Los Angeles pharmacist Rouzbeh Javaherian pleaded guilty to defrauding the Medicare Part D program through his pharmacy called Emoonah Inc. (d/b/a Westaid Pharmacy and Medical Supply).  Specifically, he paid illegal cash kickbacks to Medicare beneficiaries to induce them to submit their prescriptions to Westaid and he submitted fraudulent claims to Medicare Part D plan sponsors for prescriptions he did not actually fill.  DOJ