Compounding Pharmacy Reaches Settlement in Whistleblower Lawsuit

The United States recently announced that it has settled allegations that a Jacksonville-based compounding pharmacy knowingly billed the government for improper and medically unnecessary compounding pain prescriptions. The allegations resolved included liability under the False Claims Act.

The government has reached a settlement with the defendant, Blanding Health Mart Pharmacy (“Blanding”). In reaching this settlement, the parties resolved allegations that, from February 9, 2015, to April 13, 2015, Blanding sought reimbursement for compounding pharmaceutical prescriptions that were not medically necessary and were written by physicians that had never actually seen the patients. The government agreed to accept $8,441,107 to resolve these allegations.

This case further demonstrates the government’s strong focus on combatting fraud associated with compounded medications.  Of all the government health care programs, Tricare has been defrauded the most by compound pharmacies.

To provide some background, traditionally, a drug is compounded through the process of mixing, combining, or altering ingredients, to create a customized drug tailored to the medical needs of an individual patient upon receipt of a prescription.  Compounding allows the physician the ability to combine ingredients to create a drug that will benefit the patient the most.

Thus, compounded medications were never intended to be mass produced. Rather, they were meant as a substitute medication in rare instances where traditional, FDA approved medications could not properly treat the patient’s medical condition.  However, over the past few years, compound medications have been prescribed at alarming rates – suggesting that physicians are not prescribing these medications to treat the individual needs of individual patients.

As a result, the federal government has recently focused its efforts on combating fraud in the compound medication marketplace. In many of its recent cases, the government has alleged that compound pharmacies provided prescribing physicians with kickbacks for prescribing their patients to the manufacturer’s compounded medications, in violation of the Anti-Kickback Statute.

The claims resolved by this settlement are allegations only, and there has been no determination of liability

No Fees Without Recovery

Ross M. Wolfe and the Weiser Law Firm litigate whistleblower lawsuits on a contingent fee basis, so whistleblowers do not pay attorneys’ fees or court costs unless there is a recovery.

Please contact Ross M. Wolfe if you would like to speak with a whistleblower attorney for more information about fraud in government contracts or to schedule a free consultation to confidentially discuss your potential case.