Michigan pharmacist pays $1 million to settle False Claims Act allegations

by Ben Vernia | December 9th, 2021

On December 8, the Department of Justice announced that a pharmacist in Dearborn, Michigan, and his former specialty pharmacies had agreed to pay $1 million to settle allegations, originally brought by a whistleblower, that they had submitted false claims for anti-overdose drugs. According to DOJ’s press release:

Riad “Ray” Zahr, a pharmacist in Dearborn, Michigan, along with two specialty pharmacies that Zahr formerly owned and operated, have agreed to pay the United States $1 million to resolve allegations that they submitted false claims for the drug Evzio. Evzio was an injectable form of naloxone hydrochloride indicated for use to reverse opioid overdose. Evzio was the highest-priced version of naloxone on the market, and insurers frequently required the submission of prior authorization requests before they would approve coverage for Evzio.

The United States contended that, between Aug. 1, 2017, and June 30, 2019, Plymouth Towne Care Pharmacy dba People’s Drug Store (People’s Drug Store) and Shaska Pharmacy LLC dba Ray’s Drugs (Ray’s Drugs) submitted false claims for Evzio to Medicare. In particular, the government alleged that People’s Drug Store and Ray’s Drugs submitted false and misleading prior authorization requests for Evzio that contained clinical assertions for which the pharmacies lacked any factual basis. At times, Zahr and the pharmacies initiated Evzio prescriptions based on rudimentary patient lists with only basic biographical details. Zahr and the pharmacies also included assertions in Evzio prior authorization requests purportedly authored by prescribing physicians regarding the comparative effectiveness of Evzio that the pharmacies or Zahr actually authored. The prescribing physicians did not review, sign or submit the prior authorizations at issue. The settlement also resolves allegations that Zahr, People’s Drug Store and Ray’s Drugs dispensed Evzio prescriptions to Medicare beneficiaries at times without collecting or attempting to collect co-payment obligations for Evzio, in violation of the Anti-Kickback Statute.

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The government announced that the whistleblower, a former employee of the drug maker (who had settled claims against it in November, for $12.7 million), will receive $200,000 of the settlement (a 20% relator’s share).

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