DOJ and OIG Pharmacy Enforcement Trends

Pharmacies have long been a focus of enforcement actions taken by the Department of Justice (DOJ) and the Department of Health and Human Services Office of the Inspector General (OIG). This summer has been no exception, with the DOJ and OIG bringing a number of fraud cases against pharmacies and pharmacists. Although many enforcement actions under the False Claims Act (FCA) continue to focus on illegal kickback agreements, this summer we saw an increased focus on enforcement resulting from opioid prescription and Controlled Substances Act (CSA) violations. . We also saw enforcement against pharmacies for allegedly falsifying prior authorization information and providing more insulin than the pharmacy billed payers for. This blog summarizes some of these and other key pharmacy enforcement trends this summer.

PillPack Insulin Over-Distribution Solution

The summer began with online retail pharmacy PillPack, LLC reaching a $5.79 million settlement on May 2 with the United States Attorney’s Office for the Southern District of New York and the OIG (collectively, the Government) in connection with under -reporting days of- supply of insulin pens that led to fraudulent billing of government health care programs.

According to the Settlement Rule, PillPack fraudulently reported lower days’ worth of insulin supplies than it actually distributed to patients. This alleged under-reporting often led to PillPack pharmacists dispensing insulin pen refills to patients earlier than necessary based on their current prescriptions. In addition to government health care programs approving and paying for claims they would not have otherwise approved if PillPack had reported days of supply based on the standard pharmacy billing formula used by government programs, patients allegedly received too many pens extras they didn’t need. based on their recipes.

The government intervened in one who exactly action under the FCA in connection with the filing of the lawsuit and this settlement.

Falsification of prior authorizations and waiver of co-payments

In July, Solera Specialty Pharmacy entered into a deferred prosecution agreement and paid $1.3 million in civil penalties to settle charges that it made false claims about Evzio, an anti-overdose drug manufactured by Kaleo. Solera admitted to falsifying clinical information on the prior authorization forms and signing the prior authorization forms instead of the prescribing physicians. The pharmacy also waived Medicare co-payments without determining whether the patient had a financial hardship.

Interestingly, this settlement comes eight months after Kaleo paid $12.7 million to settle FCA charges arising from the same FCA claims as Solera. Specifically, as part of Kaleo’s settlement, the government alleged that Kaleo directed physicians to send Evzio prescriptions to certain preferred pharmacies who in turn (1) submitted false prior authorization requests for Evzio; and (2) distributed Evzio without collecting or attempting to collect co-payments from government beneficiaries.

As a result, there may be similar cases to pharmacies announced in the coming months.

Controlled Substances Enforcement Actions

There were also multiple trials and settlements this summer involving opioid distribution and CSA violations. The conduct in question in the settlements ranged from dispensing the Schedule II controlled substance without a valid prescription to conspiring to distribute oxycodone from both pharmacies and prescribers. Below are examples of these enforcement actions:

• Verree Pharmacy Residence: Mitchell Spivack, owner of Verree Pharmacy in the Philadelphia, Pennsylvania area, was initially charged civilly and criminally by the United States Attorney’s Office for the Eastern District of Pennsylvania and the Pennsylvania Attorney General’s Office with conspiracy to distribute controlled substances and health care fraud June. Spivack allegedly filled prescriptions for large amounts of high-dose oxycodone and other dangerous opioids without any legitimate medical purpose and submitted fraudulent claims to health care benefit programs without actually dispensing the drugs. Subject to court approval, Spivack recently agreed to pay $4.1 million in civil damages and penalties under the FCA, CSA and civil forfeiture. Spivack previously agreed to pay $500,000 in criminal restitution and criminal forfeiture.

• Residence Rosen: Norman Rosen, medical director and part-owner of Rosen-Hoffberg Rehabilitation and Pain Management Associates, PA, pleaded guilty in the United States Attorney’s Office for the District of Maryland to conspiracy to distribute and distribute oxycodone. Rosen, among other violations, allegedly prescribed heavy doses of oxycodone to patients who did not need such high amounts or may have had substance use disorders.

Illegal bribery schemes

The DOJ continued to prosecute illegal kickback schemes by pharmacies, prescribers and manufacturers. Earlier this month, the DOJ announced that Dunn Meadow LLC (Dunn Meadow), a New Jersey pharmacy, agreed to criminal and civil penalties for violating the FCA and CSA. Its parent company, Allegheny Pharma LLC, also entered into a settlement agreement to settle civil charges against Dunn Meadow, and the two must pay up to $50 million generated from future earnings to settle the civil claims. In addition to the CSA violations, the government alleged that Dunn Meadow received kickbacks from at least one pharmaceutical manufacturer in the form of payments for “shipping fees,” although the pharmacy routinely shipped medications free of charge from the manufacturer. Dunn Meadow also provided refreshments and entertainment for prescriptions and pharmaceutical sales representatives.