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Tuesday, February 9, 2021
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Compounding Pharmacy and Owner Plead Guilty to Health Care Fraud and Kickback Scheme that
Compounding Pharmacy and Owner Plead Guilty to Health Care Fraud and Kickback Scheme that: A West Los Angeles pharmacy and its owner pleaded guilty today to federal criminal charges stemming from a scheme in which millions of dollars in reimbursements for compounded drugs were generated
Cited by 22 — PDA to Collaborate with Deloitte and U.S. FDA to Improve the Quality of Compounded Drugs. Bethesda, Md. – The Parenteral Drug Association (PDA) today ...
4 days ago — 5, 2021 /PRNewswire-PRWeb/ -- The Parenteral Drug Association (PDA) today ... to collaborate with Deloitte Consulting, LLP and the U.S. FDA's Compounding.
Compounding Pharmacy and Owner Plead Guilty to Health Care Fraud and Kickback Scheme that Led to $14 Million in Payments
Department of Justice
U.S. Attorney’s Office
Central District of California
FOR IMMEDIATE RELEASE
Friday, February 5, 2021
Compounding Pharmacy and Owner Plead Guilty to Health Care Fraud and Kickback Scheme that Led to $14 Million in Payments
LOS ANGELES – A West Los Angeles pharmacy and its owner pleaded guilty today to federal criminal charges stemming from a scheme in which millions of dollars in reimbursements for compounded drugs were generated through the payment of illegal kickbacks for patient referrals and by fraudulently paying patients’ copayments.
Navid Vahedi, 41, of Brentwood, pleaded guilty to one count of conspiracy to commit health care fraud and payment of illegal remunerations. Vahedi today also entered a guilty plea to the felony offense on behalf of his business, Fusion Rx Compounding Pharmacy.
Fusion Rx was a provider of compounded drugs, which are tailor-made products doctors may prescribe when the FDA-approved alternative does not meet the health needs of a patient. In their plea agreements, Vahedi and Fusion Rx admitted routing millions of dollars in kickback payments through the businesses of two marketers to steer prescriptions for compounded drugs to Fusion Rx. As part of the scheme, Vahedi and the two marketers provided physicians with preprinted prescription script pads that offered “check-the-box” options on the form to maximize the amount of insurance reimbursement for the compounded drugs. From May 2014 to at least February 2016, Fusion Rx received approximately $14 million in reimbursements on its claims for compounded drug prescriptions.
As part of its contracts with various insurance networks, Fusion Rx was obligated to collect copayments from patients. Because the copayments might discourage patients from requesting expensive and potentially unnecessary compounded drug prescriptions, Fusion Rx did not collect copayments with any regularity and, in other instances, it provided gift cards to patients to offset the amount of the copayments, according to court documents. After an audit raised concerns that Fusion Rx’s failure to collect copayments would be discovered, Vahedi directed Fusion Rx funds to be used to purchase American Express gift cards, which were then used to make copayments for certain prescriptions without the patients’ knowledge. Fusion Rx then submitted claims on these prescriptions to various insurance providers, falsely representing that patients had paid the required copayments.
Vahedi and Fusion Rx pleaded guilty before United States District Judge Christina A. Snyder, who scheduled a sentencing hearing on June 28, at which time Vahedi will face a statutory maximum sentence of five years in federal prison. Both defendants have agreed to pay restitution related to the copayment reimbursement part of the scheme, which is estimated to be $4,405,926. In addition to his obligation under the plea agreement to pay restitution, Vahedi also agreed to forfeit $1,338,511.
Under the terms of the plea agreements, Fusion Rx has also agreed to pay a fine sufficient to divest itself of all its remaining assets, Vahedi has agreed to have his pharmacist license revoked, and both Vahedi and Fusion Rx will be excluded from federal health care programs such as Medicare and Medicaid going forward.
The two marketers involved in the scheme – Joshua Pearson, 41, of St. George, Utah, and Joseph Kieffer, 40, of West Los Angeles – previously pleaded guilty in this case and are scheduled to be sentenced by Judge Snyder, respectively, on May 24 and June 28.
This matter was investigated by the Defense Criminal Investigative Service, the FBI, the Amtrak Office of Inspector General, the Office of Personnel Management’s Office of Inspector General, and the Office of Inspector General for the United States Department of Health and Human Services.
This case is being prosecuted by Assistant United States Attorneys Alexander B. Schwab of the Major Frauds Section and Jonathan S. Galatzan of the Asset Forfeiture Section.
Topic(s):
Health Care Fraud
Component(s):
Contact:
Thom Mrozek
Director of Media Relations
United States Attorney’s Office
Central District of California (Los Angeles)
thom.mrozek@usdoj.gov
(213) 894-6947
Press Release Number:
21-028
Thursday, February 4, 2021
FDA alerts health care professionals and compounders of potential risks associated with the compounding of remdesivir drug products
February 4, 2021
Introduction
FDA approved a new drug application (NDA) for Veklury (remdesivir), a drug indicated for adults and pediatric patients (12 years of age and older and weighing at least 40 kg) for the treatment of COVID-19 requiring hospitalization on October 22, 2020.1 The Veklury approval includes two presentations: remdesivir for injection, 100 milligrams (mg), a sterile, preservative-free lyophilized powder and remdesivir injection, 100 mg/20 milliliters (mL) (5 mg/mL), a sterile, preservative-free solution. Veklury is an injectable drug and should only be administered in a hospital or in a health care setting capable of providing acute care comparable to inpatient hospital care. Important information about using Veklury to treat COVID-19 for its approved use is available in the prescribing information which includes dosing instructions, potential side effects and drug interactions.2 Possible side effects include increased levels of liver enzymes, which may be a sign of liver injury; and allergic reactions, which may include changes in blood pressure and heart rate, low blood oxygen level, fever, shortness of breath, wheezing, swelling (e.g., lips, around eyes, under the skin), rash, nausea, sweating or shivering.
FDA understands that some compounders might be interested in compounding remdesivir drug products. However, FDA cautions against compounding remdesivir drug products and recommends that health care providers utilize the FDA-approved drug for patients who are prescribed remdesivir.
The agency reminds health care providers that compounded drugs are not FDA-approved and are not evaluated by FDA for safety, effectiveness or quality. Compounded drugs should only be used in patients whose medical needs cannot be met by an FDA-approved drug.
Discussion of Risks
Complexities related to the quality and sourcing of the remdesivir active pharmaceutical ingredient (API) and formulation of remdesivir drug products may make these drugs particularly challenging to compound. Remdesivir API is complex and neither a United States Pharmacopeia (USP) monograph nor other public quality standard for the API used in FDA-approved remdesivir is available. Remdesivir API has six stereocenters and has multiple polymorphic forms.2,3 Using API forms that differ from the API in the FDA-approved drug may affect the compounded drug’s quality, including the solubility of the API in the compounded drug.
FDA is aware of various entities (separate from the suppliers named in the approved remdesivir NDA) selling what they claim to be remdesivir API. FDA often lacks detailed information about the composition and quality of the API that suppliers sell to compounders.
In addition to complexities and risks related to the API, remdesivir drug products are complex to produce. It may be challenging for compounders to formulate remdesivir drug products that will remain stable over time and have an appropriate pH. FDA-approved remdesivir is administered intravenously as an aqueous solution and remdesivir has limited aqueous solubility. FDA is concerned that compounders may have difficulty identifying an appropriate solubilizing agent and sourcing one of sufficient quality.
Moreover, the pH of the formulation in the approved drug is critical to ensure the stability of the formulation. Additionally, FDA has concerns about the compounding of remdesivir drug products with dosage forms or routes of administration that are different from the FDA-approved drug.
Because it is challenging to formulate remdesivir as a stable drug, the agency is concerned that compounded remdesivir drug products could be of low quality potentially resulting in patient harm. Furthermore, heightened interest in remdesivir due to its use in COVID-19 patients may increase the risk that a substandard or counterfeit API is sold to compounders. Given these risks, FDA is concerned about the potential for patient exposure to substandard or adulterated compounded remdesivir drug products. These concerns are further heightened because patients who are prescribed remdesivir require hospitalization and may be critically ill.
Conclusion and Recommendations
FDA cautions against compounding remdesivir drug products under section 503A of the Federal Food, Drug, and Cosmetic Act (FD&C Act).
Drug products compounded by outsourcing facilities from bulk remdesivir do not qualify for the exemptions under section 503B of the FD&C Act unless remdesivir is added to the 503B bulks list4 or the approved remdesivir product appears on FDA’s drug shortage list.5 If a remdesivir product is added to FDA’s drug shortage list, FDA intends to consider the applicability of policies previously communicated in guidance related to current good manufacturing practice (CGMP) requirements6 for outsourcing facilities given the specific quality risks associated with remdesivir API and product formulation.
The use of remdesivir API to compound drugs may potentially pose significant risks. FDA urges compounders not to compound drug products using remdesivir API and recommends that providers utilize the FDA-approved drug for patients who are prescribed remdesivir. Compounded drugs are not FDA-approved, which means FDA has not evaluated the safety, effectiveness or quality of compounded drugs. Compounded drugs should only be used in patients whose medical needs cannot be met by an FDA-approved drug.
FDA encourages consumers, patients and health care professionals to report adverse events or quality problems experienced with the use of compounded drugs to FDA’s MedWatch Adverse Event Reporting program:
- Complete and submit the report online at www.fda.gov/medwatch/report.htm; or
- Download and complete the form, then submit it via fax at 1-800-FDA-0178.
References
- U.S. Food and Drug Administration (2020, October 22). FDA Approves First Treatment for COVID-19. [Press Release]. Retrieved from https://www.fda.gov/news-events/press-announcements/fda-approves-first-treatment-covid-19
- Gilead Sciences. VEKLURY (remdesivir) [package insert]. U.S. Food and Drug Administration. Issued October 2020. Retrieved from https://www.accessdata.fda.gov/drugsatfda_docs/label/2020/214787Orig1s000lbl.pdf.
- European Medicines Agency. Summary on compassionate use for remdesivir Gilead. Updated July 2020. Retrieved from https://www.ema.europa.eu/en/documents/other/summary-compassionate-use-remdesivir-gilead_en.pdfExternal Link Disclaimer
- Federal Food, Drug, and Cosmetic Act, § 503B(a)(2); see also, U.S Food and Drug Administration, Center for Drug Evaluation and Research. Guidance for Industry, Interim Policy on Compounding Using Bulk Drug Substances Under Section 503B of the Federal Food, Drug, and Cosmetic Act (Revision 1). Retrieved from https://www.fda.gov/regulatory-information/search-fda-guidance-documents/interim-policy-compounding-using-bulk-drug-substances-under-section-503b-federal-food-drug-and
- Federal Food, Drug, and Cosmetic Act, § 503B(a)(2)(A)(ii).
- Federal Food, Drug, and Cosmetic Act, § 501(a)(2)(B).le
Wednesday, February 3, 2021
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