The Justice Department announced on June 15, 2023 that Smart Pharmacy, Inc., SP2, LLC, and owner Gregory Balotin have agreed to pay at least $7.4 million to resolve lawsuits filed in Jacksonville, Florida, alleging they violated the False Claims Act by adding the antipsychotic drug aripiprazole to topical compounded pain creams to boost reimbursement and by routinely waiving patient copayment obligations.
Aripiprazole, which is sold under the brand names Abilify, Abilify Maintena, and Aristada, is approved by the U.S. Food and Drug Administration to treat a number of psychological conditions such as schizophrenia and Tourette’s disorder. The United States alleged that the defendants crushed aripiprazole pills approved for oral use and included them in compounded creams used topically for pain treatment, while knowing that there was not an adequate clinical basis to do so.
The defendants allegedly included the drug in the pain creams to increase their profits on prescriptions paid for by Medicare Part D and TRICARE because both Medicare Part D and TRICARE reimburse
pharmacies for the individual ingredients included in compounded drugs, thus defendants increased their reimbursement by adding aripiprazole to the combination of drugs used in their pain creams despite no medical benefit to their patients.
The government also alleged that the defendants improperly waived patient copayments to induce patients to accept the pain cream prescriptions. Although copayments may be waived in certain unique circumstances, such as on the basis of an individualized assessment of a patient’s financial hardship, the defendants allegedly routinely waived copayments without regard to patient need.
“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, head of the Justice Department’s Civil Division. “The department will hold accountable those who undermine the integrity of federal healthcare programs for personal profit.”
At the Florida Healthcare Law Firm, we have compliance experts who can help your compounding pharmacy operate in compliance with applicable laws and regulations. Call now to get started.