DOJ intervenes in compounding pharmacy qui tam cases

by Ben Vernia | June 14th, 2019

On June 14, the Department of Justice announced that it was intervening in two qui tam (whistleblower) cases against Florida-based compounding pharmacies. According to DOJ’s press release:

The Department of Justice announced today that the United States has filed a complaint in intervention against Smart Pharmacy Inc., and SP2 LLC, two compounding pharmacies located in Jacksonville, Florida. The complaint alleges that the pharmacies improperly included the drug aripiprazole, an atypical antipsychotic drug, in compounded pain creams in order to boost the pharmacies’ reimbursement for the prescriptions and that the pharmacies routinely waived patient copayment obligations. The government has also brought claims against Gregory Balotin, a co-owner of the pharmacies, for his involvement in the alleged schemes.

Aripiprazole, which is sold under the brand names Abilify, Abilify Maintena, and Aristada, is approved by the U.S. Food and Drug Administration to treat a number of psychological conditions such as schizophrenia, Tourette’s disorder, irritability associated with autistic disorder, and manic and mixed episodes associated with Bipolar I. The complaint alleges that the defendants crushed pills of aripiprazole and included them in compounded creams used topically for pain treatment while knowing that there was not an adequate clinical basis for adding aripiprazole to the compound. The complaint alleges that, by including the drug in the pain creams, the defendants substantially increased their reimbursement for prescriptions for the creams from Medicare Part D and TRICARE, the federal health care program for active duty military personnel, retirees, and their families.

The government’s complaint also alleges that the defendants improperly waived patient copayments. While copayments may be waived in certain unique circumstances, such as on the basis of financial hardship of the patient, the defendants are alleged to have routinely waived patient copayments without regard for whether a waiver was warranted.

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