On June 15, the Department of Justice announced that two Jacksonville, Florida pharmacies and their owner agreed to pay $7.4 million at a minimum to resolve allegations that they violated the False Claims Act (FCA). The government alleges that Smart Pharmacy Inc., SP2, LLC, and their owner Gregory Balotin added crushed pills of the antipsychotic drug aripiprazole to topical pain creams in order to increase their reimbursements from Medicare Part D and TRICARE, the federal health care program for active duty military personnel, retirees, and their families. The government alleges the involved parties knew that there was not an adequate clinical basis for adding aripiprazole, an antipsychotic drug approved to treat schizophrenia and Tourette’s disorder.
The government’s allegations stemmed from lawsuits filed by Amy Sanchez and Ashok Kohli, two former employees of Smart Pharmacy. Sanchez and Kohli filed a civil suit under the qui tam provision of the FCA. Qui tam claims enable private citizens to file lawsuits on behalf of the government if they know of an individual or company defrauding the government. Qui tam whistleblowers are eligible to receive between 15 and 30% of the government’s recovery. Their award share has not yet been determined.
“When pharmacies inflate their revenue with medically unsupported prescription ingredients, they compromise the quality of patient care and waste taxpayer dollars,” said Principal Deputy Assistant Attorney General Brian M. Boynton,...
Although on appeal the court distinguished that there was new information in the claim, the court ultimately found the new information was not material, nor was it plead with particularity. The U....