Pharmacy Fraud under the False Claims Act

Our whistleblower attorneys help pharmacists and pharmacy assistants report prescription drug fraud to the Justice Department through the False Claims Act. If you have evidence of pharmacy fraud and would like to discuss reporting it to the U.S. Government, please call 1-800-590-4116 to speak to an attorney. We offer a confidential, free initial consultation for potential whistleblowers in the health care industry.

More than $100 million in government funds is spent annually at pharmacies by the United States. Each year, millions of dollars from that allocation is lost to pharmacy fraud. The Government relies on whistleblowers to help report health care fraud against it. In order to incentivize them to come forward, Congress created rewards of between 15 and 30 percent of the government’s recovery for the whistleblower.

Types of Pharmacy Fraud

Proper Prescriptions and Procedures: Dispensing medications without a valid prescription, either initially or upon automatic refill without a request from the beneficiary or their physician. Pharmacies are also required to follow specified procedures for dispensing certain medications under the Controlled Substances Act.

Co-Payment Waivers and Cards: Pharmacies may not generally waive co-pays for Medicare and Medicaid patients without an individual assessment of the patient’s ability to pay. Additionally, pharmaceutical manufacturer copay cards may not be accepted for Government Healthcare Program business.

Drug Diversion: Pharmacists may participate in various schemes to divert drugs from their intended purpose to an illegal purpose. In the past, these schemes primarily involved controlled substances (narcotics) which were illegally resold or used for recreational purposes. Now, a 2015 HHS OIG Data Brief extended the occurrence of this problem to noncontrolled substances such as respiratory and antipsychotic medications. According to OIG, the diversion of mediations can create a significant financial loss to Medicare.

Best Price: The federal government will only pay pharmacies their usual and customary charge for the general public. Some states, however, go farther and require the pharmacy to give them their best available price. If a pharmacy in these states gives discounts to private insurance companies that it does not give the Medicaid program, it is in violation of the False Claims Act.

Compounding Drug Fraud: Compounded medications generally cost more than regular prescriptions because they are individually prepared for the person by a specialty pharmacy. However, many have speculated that this market is rife with fraud and abuse because the patient could be treated instead with a less expensive, pre-made and FDA approved medication. Compounding creams are one area where this has happened. Or the compounding pharmacy prepares and charges for preparation of a drug that is not actually medically necessary or tailored to the patient’s needs. They have also been accused of improper kickbacks to physicians in order to secure the high profit margins from filling these prescriptions.

Kickbacks: Pharmacies that receive kickbacks from drug companies or pay kickbacks to doctors may be doing so in violation of the Anti-Kickback Statute

Specialty Pharmacies: Close ties between specialty pharmacies and pharmaceutical manufacturers have led to allegations of kickbacks from the drug companies to the pharmacies in order to push their drugs improperly.

Nursing Home Pharmacies: Long term care facilities such as nursing homes often contain pharmacies to meet the needs of their patient’s prescriptions. Approximately two million seniors in skilled nursing facilities and assisted living facilities receive their medications from long-term care (LTC) pharmacies and Medicare pays for the majority of these prescriptions. In addition to the above types of pharmacy fraud, there may also be special issues raised, such as kickbacks, because of their integration or ties to the nursing home.

Questions? Call 1-800-590-4116.  Our whistleblower attorneys can educate you on the False Claims Act procedure and evaluate your evidence of wrongdoing by the pharmacy.

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