Two Jacksonville Compounding Pharmacies and Their Owner Agree to Pay at Least $7.4 Million to Resolve False Claims Act Allegations

<p>FOR IMMEDIATE RELEASE<br &sol;>&NewLine; Thursday&comma; June 15&comma; 2023<br &sol;>&NewLine; Two Jacksonville Compounding Pharmacies and Their Owner Agree to Pay at Least &dollar;7&period;4 Million to Resolve False Claims Act Allegations<&sol;p>&NewLine;<div class&equals;"mh-content-ad"><script async src&equals;"https&colon;&sol;&sol;pagead2&period;googlesyndication&period;com&sol;pagead&sol;js&sol;adsbygoogle&period;js&quest;client&equals;ca-pub-9162800720558968"&NewLine; crossorigin&equals;"anonymous"><&sol;script>&NewLine;<ins class&equals;"adsbygoogle"&NewLine; style&equals;"display&colon;block&semi; text-align&colon;center&semi;"&NewLine; data-ad-layout&equals;"in-article"&NewLine; data-ad-format&equals;"fluid"&NewLine; data-ad-client&equals;"ca-pub-9162800720558968"&NewLine; data-ad-slot&equals;"1081854981"><&sol;ins>&NewLine;<script>&NewLine; &lpar;adsbygoogle &equals; window&period;adsbygoogle &vert;&vert; &lbrack;&rsqb;&rpar;&period;push&lpar;&lbrace;&rcub;&rpar;&semi;&NewLine;<&sol;script><&sol;div>&NewLine;<p>The Justice Department announced today that Smart Pharmacy&comma; Inc&period;&comma; SP2&comma; LLC&comma; and owner Gregory Balotin have agreed to pay at least &dollar;7&period;4 million to resolve lawsuits filed in Jacksonville&comma; Florida&comma; alleging they violated the False Claims Act by adding the antipsychotic drug aripiprazole to topical compounded pain creams to boost reimbursement and by routinely waiving patient copayment obligations&period; The settlement amount is based on the defendants’ ability to pay&period;<&sol;p>&NewLine;<p>&OpenCurlyDoubleQuote;When pharmacies inflate their revenue with medically unsupported prescription ingredients&comma; they compromise the quality of patient care and waste taxpayer dollars&comma;” said Principal Deputy Assistant Attorney General Brian M&period; Boynton&comma; head of the Justice Department’s Civil Division&period; &OpenCurlyDoubleQuote;The department will hold accountable those who undermine the integrity of federal healthcare programs for personal profit&period;” <&sol;p>&NewLine;<p>&OpenCurlyDoubleQuote;A primary mission of the U&period;S&period; Attorney’s Office is protecting the Medicare and TRICARE programs from fraud&comma;” said U&period;S&period; Attorney Roger Handberg for the Middle District of Florida&period; &OpenCurlyDoubleQuote;This case exemplifies our commitment to pursue pharmacies and pharmacists who abuse federal healthcare programs at the expense of the taxpayers&period;”<&sol;p>&NewLine;<p>Aripiprazole&comma; which is sold under the brand names Abilify&comma; Abilify Maintena&comma; and Aristada&comma; is approved by the U&period;S&period; Food and Drug Administration to treat a number of psychological conditions such as schizophrenia and Tourette’s disorder&period; The United States alleged that the defendants crushed aripiprazole pills approved for oral use and included them in compounded creams used topically for pain treatment&comma; while knowing that there was not an adequate clinical basis to do so&period; The defendants allegedly included the drug in the pain creams to increase their profits on prescriptions paid for by Medicare Part D and TRICARE&comma; the federal health care program for active duty <a class&equals;"wpil&lowbar;keyword&lowbar;link" href&equals;"https&colon;&sol;&sol;www&period;fraudswatch&period;com&sol;category&sol;military-scammer&sol;amp&sol;" title&equals;"military" data-wpil-keyword-link&equals;"linked" data-wpil-monitor-id&equals;"413">military<&sol;a> personnel&comma; retirees&comma; and their families&period; Both Medicare Part D and TRICARE reimburse pharmacies for the individual ingredients included in compounded drugs&comma; thus defendants increased their reimbursement by adding aripiprazole to the combination of drugs used in their pain creams&period;<&sol;p>&NewLine;<p>The government also alleged that the defendants improperly waived patient copayments to induce patients to accept the pain cream prescriptions&period; Although copayments may be waived in certain unique circumstances&comma; such as on the basis of an individualized assessment of a patient’s <a class&equals;"wpil&lowbar;keyword&lowbar;link" href&equals;"https&colon;&sol;&sol;www&period;fraudswatch&period;com&sol;tag&sol;financial-fraud&sol;amp&sol;" title&equals;"financial" data-wpil-keyword-link&equals;"linked" data-wpil-monitor-id&equals;"1012">financial<&sol;a> hardship&comma; the defendants allegedly routinely waived copayments without regard to patient need&period;<&sol;p>&NewLine;<p>In connection with the settlement&comma; Gregory Balotin has agreed to enter into a three-year integrity agreement with the Department of Health and Human Services Office of Inspector General &lpar;HHS-OIG&rpar;&comma; which includes an annual claims review by an independent review organization&period;<&sol;p>&NewLine;<p>&OpenCurlyDoubleQuote;Pharmacies participating in Medicare are obligated to obey laws designed to protect both the integrity of this program and the quality of care provided to patients&comma;” said Special Agent in Charge Omar Pérez Aybar of HHS-OIG&period; &OpenCurlyDoubleQuote;With our law enforcement partners&comma; our agency is committed to investigating alleged health care fraud to protect both federal health care programs as well as the individuals served by those programs&period;”<&sol;p>&NewLine;<p>&OpenCurlyDoubleQuote;We are grateful to the U&period;S&period; Department of Justice&comma; the U&period;S&period; Attorney’s Office&comma; and other state and federal officials for their unwavering commitment to protect taxpayer dollars and safeguard the TRICARE pharmacy benefit&comma;” said Chief Edward C&period; Norton Jr&period; of the Defense Health Agency’s Pharmacy Operations Division&period; &OpenCurlyDoubleQuote;Their efforts ensure our service members&comma; veterans&comma; and their families continue to receive the highest-quality pharmacy benefit commensurate with the service and sacrifice they make for our nation&period;”<&sol;p>&NewLine;<p>&OpenCurlyDoubleQuote;Health care providers and suppliers that serve our nation’s active duty service members&comma; military retirees&comma; and their families are expected to meet the highest standards of ethical and professional behavior&comma;” said Special Agent in Charge Darrin K&period; Jones of the Department of Defense &lpar;DoD&rpar; Office of Inspector General&comma; Defense Criminal Investigative Service &lpar;DCIS&rpar;&comma; Southeast Field Office&period; &OpenCurlyDoubleQuote;DCIS and its law enforcement partners will continue to investigate unprincipled health care providers that undermine the integrity of the DoD’s TRICARE program&period;”<&sol;p>&NewLine;<p>The lawsuits&comma; United States ex rel&period; Sanchez v&period; Smart Pharmacy&comma; Inc&period;&comma; et al&period;&comma; No&period; 14-cv-1453 &lpar;M&period;D&period; Fla&period;&rpar;&comma; and United States ex rel&period; Kohli v&period; Smart Pharmacy&comma; Inc&period;&comma; et al&period;&comma; No&period; 16-cv-387 &lpar;M&period;D&period; Fla&period;&rpar;&comma; were originally filed in the U&period;S&period; District Court for the Middle District of Florida by Amy Sanchez and Ashok Kohli&comma; two former employees of Smart Pharmacy&period; The lawsuits were filed under the qui tam or whistleblower provisions of the False Claims Act&comma; which permit private parties to sue on behalf of the United States for false claims and share in any recovery&period; The Act permits the United States to intervene and take over such lawsuits&comma; which the United States did here&comma; in part&period; The share to be awarded in this case has not been determined&period;<&sol;p>&NewLine;<p>This matter was handled by the Civil Division’s Commercial Litigation Branch and the U&period;S&period; Attorney’s Office for the Middle District of Florida&comma; with assistance from HHS-OIG&comma; DCIS&comma; the Department of Veterans Affairs Office of Inspector General&comma; the Department of Labor Office of Inspector General&comma; and the Office of Personnel Management Office of Inspector General&period;<&sol;p>&NewLine;<p>This matter was handled by Assistant U&period;S&period; Attorney Collette Cunningham for the Middle District of Florida&comma; Trial Attorneys Nicholas Perros and Jessica Sievert of the Justice Department’s Civil Division&comma; former Civil Division Trial Attorney Holly Snow &lpar;now an Assistant U&period;S&period; Attorney for the Western District of North Carolina&rpar;&comma; and former Civil Division Trial Attorney Andrew Jaco &lpar;now with the Justice Department’s Criminal Division&rpar;&period; <&sol;p>&NewLine;<p>The claims asserted against the defendants are allegations only and there has been no determination of liability&period; <&sol;p>&NewLine;<p> Attachment&lpar;s&rpar;&colon; <img title&equals;"application&sol;pdf" src&equals;"https&colon;&sol;&sol;www&period;justice&period;gov&sol;modules&sol;file&sol;icons&sol;application-pdf&period;png"&sol;> <a href&equals;"https&colon;&sol;&sol;www&period;justice&period;gov&sol;opa&sol;press-release&sol;file&sol;1587711&sol;download" rel&equals;"noreferrer noopener" >Download Settlement Agreement<&sol;a>Topic&lpar;s&rpar;&colon; False Claims ActComponent&lpar;s&rpar;&colon; <a href&equals;"http&colon;&sol;&sol;www&period;justice&period;gov&sol;civil&sol;" rel&equals;"noreferrer noopener" >Civil Division<&sol;a><a href&equals;"http&colon;&sol;&sol;www&period;justice&period;gov&sol;usao-mdfl" rel&equals;"noreferrer noopener" >USAO &&num;8211&semi; Florida&comma; Middle<&sol;a>Press Release Number&colon; 23-670 <&sol;p>&NewLine;<p> Updated June 16&comma; 2023<a href&equals;https&colon;&sol;&sol;www&period;justice&period;gov&sol;opa&sol;pr&sol;two-jacksonville-compounding-pharmacies-and-their-owner-agree-pay-least-74-million-resolve> Original Article <&sol;a><&sol;p>&NewLine;