Wednesday, March 30, 2022

 

 

 

Operator of Portland Animal Rescue Business Charged for Role in Wire Fraud Conspiracy, Illegally Dispensing Animal Drugs

PORTLAND, Ore.—The operator of a Portland area animal rescue, rehabilitation, boarding, and adoption company is facing federal charges for her role in a conspiracy to defraud customers and for illegally dispensing animal drugs.

Tori Lynn Head, 26, has been charged by criminal information with conspiracy to commit wire fraud and dispensing animal drugs without proper labeling.

According to the information, in November 2019, Head and others started Woofin Palooza, an animal rescue business with facilities in Multnomah and Columbia County, Oregon. Head and others are alleged to have obtained pets with medical and behavioral issues from out-of-state and made them available for adoption to paying customers. Between December 2019 and January 2021, on more than 280 occasions, Head and others made material misrepresentations about the health and behavior of the animal offered for adoption. Based on these misrepresentations, customers paid Woofin Palooza more than $82,000 in adoption fees. During this same time period, Head sold customers mislabeled animal drugs in violation of the Food, Drug, and Cosmetic Act.

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Use of Marketing Reps: Avoid Legal Pitfalls Jeffrey S. Baird, JD • March 25, 2022

https://medtrade.com/news/general-healthcare/use-of-marketing-reps-avoid-legal-pitfalls/?blocked=true 

Pennsylvania Man Admits Role in $35 Million Pharmacy Compounded Medication Scheme

 Department of Justice

U.S. Attorney’s Office
District of New Jersey

FOR IMMEDIATE RELEASE
Tuesday, March 29, 2022

Pennsylvania Man Admits Role in $35 Million Pharmacy Compounded Medication Scheme

NEWARK, N.J. – A Langhorne, Pennsylvania, man today admitted participating in a massive compounded-medication kickback scheme that he and others ran out of a pharmacy in Clifton, New Jersey, U.S. Attorney Philip R. Sellinger announced.

Robert Schneiderman, 79, pleaded guilty before U.S. District Judge John Michael Vazquez in Newark federal court to two counts of an indictment charging him with one count of conspiracy to commit health care fraud and one count of conspiracy to violate the Anti-Kickback Statute.

According to documents filed in this case and statements made in court:

From 2014 through 2016, Schneiderman and his conspirators used Main Avenue Pharmacy, a mail-order pharmacy with a storefront in Clifton, to run a fraud and kickback scheme involving compounded drugs like scar creams, pain creams, migraine mediation, and vitamins. Schneiderman was the President of Main Avenue Pharmacy and was a founder and CEO of its corporate parent.

The scheme revolved around identifying compounded drugs that would yield exorbitant reimbursements from health insurers, including both federal and commercial payers. Once Main Avenue identified lucrative formulas for compounds, it would create large prescription pads with precisely those formulas on it. The prescription pad was extremely easy to use – it included check boxes for doctors to select a particular compounded formula. This increased the likelihood that the doctor would not alter the high-paying formula. There was also a place to select up to a dozen refills and a box authorizing the pharmacy to alter the ingredients itself in case an insurer wasn’t covering a particular compounded medication.

Once the prescription pad was set, Main Avenue would disseminate it to its stable of marketers across the country, with whom it had contractual relationships. The marketing companies would in turn distribute the prescription pad to telemedicine companies and doctors with whom they had a financial arrangement.

Physicians who signed prescriptions for compounded medications that were filled at Main Avenue often had never even spoken to the patient, let alone examined him or her. Once the prescriptions were signed by a doctor, they would be returned to Main Avenue Pharmacy.  Main Avenue would then fill the prescription regardless of its medical necessity and then submit claims to health care benefit programs for reimbursement. They did so with federal payers like Medicare and Tricare and with commercial payers in New Jersey and elsewhere.

After Main Avenue obtained reimbursement from the health insurers, they would pay kickbacks to the marketers who had generated the prescriptions based on the overall adjudication amount. Main Avenue signed contracts with many of the marketers, and the contracts themselves spelled out the kickback arrangement, which called for Main Avenue to pay each marketer money based on the volume of referrals of compounded prescriptions and the reimbursement amount that Main Avenue received.

As part of the scheme, Main Avenue would routinely waive co-payments of the patients to whom they were sending multiple prescriptions. It did this to ensure that the patients would keep the medications that Main Avenue had sent regardless of whether the patient wanted them.  On some occasions, Main Avenue Pharmacy paid the co-payments on behalf of the patients, and falsified money orders from the patients to Main Avenue to make it appear as if the patients had paid their co-payments when they had not.

On compounded medications alone, Main Avenue received over $34 million in reimbursements from health care benefit programs. Approximately $8 million of that total was paid by federal payers. Schneiderman himself earned over $400,000 through the course of the scheme.

The count of conspiracy to commit health care fraud carries a maximum penalty of 10 years in prison. The count of conspiracy to violate the Anti-Kickback Statute carries a maximum penalty of five years in prison. Both counts also are punishable by a maximum fine of $250,000 fine, or twice the gross gain or loss from the offense, whichever is greatest. Sentencing is scheduled for Sept. 16, 2022.

U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch in Newark; the U.S. Department of Defense, Office of the Inspector General, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Patrick J. Hegarty; special agents of the Department of Health and Human Services – Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; and special agents of the Department of Veterans Affairs, Office of Inspector General, under the direction of Special Agent in Charge Christopher Algieri, with the investigation leading to today’s guilty plea.

The government is represented by Health Care Fraud Unit Chief Jason S. Gould of the U.S. Attorney’s Office in Newark.

Topic(s): 
Health Care Fraud
Component(s): 
Press Release Number: 
22-117
Updated March 29, 2022

Wednesday, March 23, 2022

 

§ 3.2-4901. Exemptions from chapter - Virginia Law

17 hours ago — 1. The compounding or dispensing of veterinarians' prescriptions, nor the dispensing of drugs or preparations by registered pharmacists compounded at the ..

Olympia Pharmacy Issues Voluntary Nationwide Recall of Seven Compounded Products Due to Being Out-of-Specification U.S. Food and Drug Administration sent this bulletin at 03/21/2022 02:14 PM EDT

 Olympia Pharmacy has issued a voluntary nationwide recall of seven compounded products due to being out-of-specification. The voluntary recall is for 11 specific lots of Trimix Formulas F-9, T-105, SB-4, Sermorelin, Sincalide, Hydroxocobalamin, and NAD, compounded injectables to the consumer level.

Risk Statement: Administration of subpotent Hydroxocobalamin in infants, pregnant/breastfeeding women, and elderly populations are at risk for vitamin B12 deficiency and there is a reasonable probability they could experience adverse events including muscle weakness, neurological peripheral neuropathic numbness or pain, vision loss, and psychiatric disorders (depression, memory loss). Additionally, injectable compounded products, found to contain more or less drug product than the labeled strength or which reconstitute at a different rate than intended, may result in either too much or too little medication being administered. This could result in lower-than-expected effectiveness of the drug or unintended adverse side effects.

Olympia Pharmacy has not received any reports or concerns from patients relating to the safety of the recalled sterile compounded products, and no patients have reported any adverse events attributed to any of the recalled sterile compounded products.

Although compounded drugs can serve an important medical need for certain patients, they also present a risk to patients. FDA’s compounding program aims to protect patients from unsafe, ineffective and poor quality compounded drugs, while preserving access to lawfully-marketed compounded drugs for patients who have a medical need for them.

 

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The why and when to compound medications - Veterinary ...

1 day ago — After all, compounding pharmacies are there to make our lives a little easier. Why are some doctors hesitant on using compounded medications? I believe the mai

 

Thursday, March 17, 2022

Former Owner of New Jersey Marketing Company Admits Role in $6 Million Compounded Prescription Drug Scheme

Department of Justice
U.S. Attorney’s Office
District of New Jersey

FOR IMMEDIATE RELEASE
Thursday, March 17, 2022

Former Owner of New Jersey Marketing Company Admits Role in $6 Million Compounded Prescription Drug Scheme

NEWARK, N.J. – The former owner of a New Jersey marketing company admitted his role in a scheme to defraud public and private health benefits programs of over $6 million for the billing of medically unnecessary compounded prescriptions, U.S. Attorney Philip R. Sellinger announced today. 

Michael Drobish, 43, of Cedar Grove, New Jersey, pleaded guilty by videoconference before U.S. District Judge John Michael Vazquez on March 16, 2022, to an information charging him with conspiracy to commit health care fraud.

According to documents filed in this case and statements made in court:

Compounding is a practice in which a pharmacist or physician combines, mixes, or alters ingredients of a drug to create a medication tailored to the needs of an individual patient. The Food and Drug Administration does not approve compounded drugs and thus does not verify the safety, potency, effectiveness, or manufacturing quality of compounded drugs. Generally, a physician may prescribe compounded drugs when an FDA-approved drug does not meet the health needs of a particular patient.

Between April 2014 and January 2017, Drobish conspired with others to submit fraudulent prescriptions for compounded medications to public and private insurance plans. The scheme centered on the discovery that certain insurance plans paid for prescription compounded medications – including scar creams, wound creams, and metabolic supplements/vitamins – at exorbitant reimbursement rates.

Drobish hired sales representatives through his marketing company to target individuals who had insurance plans that covered compounded medications. The sales representatives then convinced those individuals to obtain prescriptions for compounded medications, regardless of medical necessity, often by providing them with cash payments. The individuals were then directed to certain telemedicine companies, which the marketing company or its affiliates paid to issue the prescriptions. The prescribing physicians at the telemedicine companies would then write the prescriptions without performing any examination or after deliberately conducting cursory examinations that were insufficient to legitimately deem a compounded drug medically necessary. 

Once the prescriptions were written, they were filled by certain compounding pharmacies with which Drobish conspired. The compounding pharmacies would then receive reimbursement from the insurance plans, and would pay Drobish’s marketing company a percentage of the reimbursement amount. Drobish would retain a portion of the payment and provide a “commission” payment to the relevant sales representative.

The conspiracy to commit health care fraud charge carries a maximum penalty of 10 years in prison and a $250,000 fine, or twice the gain or loss from the offense. As part of his plea agreement, Drobish must forfeit $532,650 in criminal proceeds and pay restitution of at least $6.1 million. Sentencing is scheduled for July 19, 2022.

U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr., and the U.S. Department of Defense Office of Inspector General, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Patrick J. Hegarty, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Adam Baker of the U.S. Attorney’s Office, Opioid Abuse Prevention and Enforcement Unit in Newark.

Topic(s): 
Health Care Fraud
Component(s): 
Press Release Number: 
22-100
Updated March 17, 2022