Pharmacies may engage in a variety of illegal schemes to make profits from selling expensive drugs at the expense of a federal healthcare program like Medicare, Medicaid, or TRICARE. Such schemes have included:
- Dispensing drugs and other products without a proper prescription. For example, Newman & Shapiro attorney Jeffrey Newman represented a whistleblower in a $35 million settlement to resolve allegations that two pharmacy subsidiaries of Polymedica violated the False Claims Act by dispensing and billing Medicare for diabetic and nebulizer products without first obtaining a signed doctor’s order or prescription for the products.
- Paying kickbacks to nursing homes to get prescription referrals. For example, as an Assistant United States attorney, Newman & Shapiro attorney Gregg Shapiro negotiated a $98 million with Omnicare, then the nation’s largest long-term care pharmacy, to resolve allegations that, among other things, Omnicare paid kickbacks to two nursing home chains in exchange for the right to continue providing pharmacy services to the nursing homes.
- Paying kickbacks to physicians and others who are in a position to direct prescriptions for expensive drugs to the pharmacies. For example, in 2021, six individuals, including employees of a Virginia pharmacy, Royal Care Pharmacy, and a former sales representative for Kaleo Pharmaceuticals, were sentenced on charges that included a charge that the pharmacy paid kickbacks to the sales representative in exchange for referrals of prescriptions for an expensive naloxone auto-injector device used to treat opioid overdoses.
- Submitting fraudulent prior authorization requests to health plans and pharmacy benefit managers (PBMs) to get reimbursement for expensive drugs. For example, in 2019, the owner of a New Jersey pharmacy, Empire Pharmacy, pleaded guilty to a charge that he directed Empire employees, including two pharmacists, to falsify prior authorization forms for medications for different conditions.