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6.15.2016

The United States District Court of the Middle District of Florida unsealed an indictment against a doctor who prescribed compounded pain creams to patients. These compounded pain creams were marketed by a company, for whom the doctor served as an “in network” physician. As part of the scheme, the marketing company received a kickback of approximately 50 percent from the filling compounding pharmacy for each claim paid by Tricare, Medicare, or other health care insurer.

As stated in the indictment, the marketing company entered into a conspiracy with the compounding pharmacy and the doctor. To further that conspiracy, the marketing company employed sales representatives to recruit patients to be seen by physicians and to provide patients with preprinted prescriptions featuring compounded medications with high rates of reimbursement. The doctors then prescribed those patients with the marketed compounded pain creams, which were filled by the compounding pharmacy. This conspiracy specifically targeted Tricare beneficiaries.

Tricare is the federal health insurance program that provides coverage for U.S. military members, retirees, and their family members. Up until 2015, Tricare covered compounded medications based on individual ingredients submitted by the pharmacy. Since then, Tricare screens all ingredients in compounded to drugs. Under the old system the price of the compounded pain creams ranged from approximately $900 to $21,000 for a one-month supply.

The doctor above not only received cash payments, but also received other things of value for prescriptions, such as payments for a luxury car. To avoid detection, the doctor and others referred to the payment of kickbacks as delivery of “FedEx packages.” For these acts, the government charged the doctor with healthcare fraud, violation of the Anti-Kickback Statute, and conspiracy. Additionally, the government demanded the forfeiture of the luxury car and $5.3 million.

This highlights the increased scrutiny of the compounding drugs industry by the government. As former federal prosecutors, the attorneys at Stumphauzer & Sloman have experience handling these types of cases. If you have any questions please call 305-371-9686.

The indictment can be found here.

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