There’s certainly a lot of enforcement activity against compounding pharmacies these days. The ramp-up began around 2012 after a fungal meningitis outbreak that caused 64 deaths and many more infections related to the compounding activities at New England Compounding Centers. That heightened scrutiny continues to rock the compounding pharmacy world, not just from the drug quality, safety, and security standpoint, but also from the standpoint of the potential fraud and abuse inherent in the pricing of ingredients and the final compounded product as well as relationships between compounding pharmacies and the physicians who refer to them.
LATEST ENFORCEMENT ACTION
Announced yesterday by the U.S. Department of Justice (DOJ), the latest enforcement action is against Professional Compounding Centers of America Inc. (PCCA), a Houston-based supplier of wholesale compounding ingredients to other pharmacies. In many prior enforcement actions, compounding pharmacies have been charged in various schemes to defraud the federal government by filing false claims for prescriptions that were not medically necessary or not requested by patients and paying kickbacks to prescribing physicians. While similar in some ways to prior enforcement actions, this one differs because in this case, the DOJ reached back to the wholesaler of the compounding ingredients that were sold to the pharmacies that then submitted inflated claims to TRICARE. Here, the DOJ nabbed PPCA in a complaint alleging False Claims Act violations, specifically that PCCA reported fraudulent and inflated Average Wholesale Prices (AWPs) for the compounding ingredients that it sold to pharmacies. Those inflated AWPs resulted in pharmacies submitting inflated claims to TRICARE, the federal payer for military personnel and their dependents.Continue reading