Pharmaceutical drugs sales, qui tam lawsuits
  and the False Claims Act -- Part V

Pharmacy benefits management companies, 340B drug sales and the False Claims Act
The federal government has said that pharmacy benefit management companies – which administer prescription drug benefit plans and have networks of participating pharmacies – are liable under the False Claims Act if they pay pharmacists to switch from cheaper drugs to more expensive drugs for Medicaid beneficiaries.

Three of the largest pharmacy benefits management companies – Caremark Rx Inc., Medco Health Solutions Inc. and Express Scripts Inc. – face qui tam lawsuits and state and federal government investigations for defrauding health plan beneficiaries, including Medicaid and other federal and state health insurance recipients.

Qui tam lawsuits against Caremark Rx Inc. allege Caremark defrauded a Florida health plan for retired state workers by failing to give it credit for medications that were returned, unopened, by customers and changing prescriptions without permission.

Qui tam lawsuits and government complaints against Medco say that the pharmacy benefits management company destroyed patients’ mail-order prescriptions so that Medco could avoid penalties for its repeated delays in filling patient prescriptions. In addition, the whistleblowers allege that Medco mailed prescriptions to patients with fewer than the number of pills ordered and paid for then charged patients and health plans as if they had dispensed the full amount.

Violations of section 340B of the Public Health Act also could be the basis for a qui tam lawsuit. Section 340B requires drug manufacturers to discount deeply the price of drugs they sell to “disproportionate share hospitals”(DSH) for outpatient use. Generally the manufacturers must give DSH hospitals the same price they give the federal government. DSH hospitals serve largely indigent patients or patients in rural communities.

If pharmaceutical companies overcharge DSH hospitals for 340B drugs or engage in other improper practices concerning the program, there may be liability under the False Claims Act.

Back to main pharmaceutical fraud page.