A Texas federal court recently denied a pharmaceutical supplier’s motion to dismiss claims brought by a whistleblower under the federal False Claims Act (FCA) alleging violations of the Anti-Kickback Statute (AKS) and manipulation of Average Wholesale Pricing (AWP) rules. The complaint was filed by a pharmacist (the Relator) who previously worked for the defendant, Professional Compounding Centers of America Inc. (PCCA), a pharmaceutical supplier which sells active ingredients to compounding pharmacies. The Relator alleged that PCCA reported inflated AWPs for the ingredients it sold to its compounding pharmacy customers as part of a scheme that violated the FCA and AKS. The Government filed its complaint in partial intervention in November 2021, asserting FCA claims against PCCA for causing the submission of false claims to TRICARE and for reporting false AWPs to the pricing compendia upon which TRICARE reimbursement is based.
1. Government’s Allegations.
The government alleged that PCCA (1) knew that the AWPs it submitted to the third-party pricing compendia were false; (2) that its customers submitted claims for compounds to TRICARE seeking reimbursement based on fraudulent AWPs; (3) that the inflated AWPs would drive customers to purchase and submit claims for ingredients solely because of their reimbursement potential; and (4) that the AWPs were material to payment decisions made by insurers like TRICARE. The government alleged specific examples of PCCA’s conduct that...
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