Compound Ingredient Supplier Fagron Holding USA LLC to Pay $22.05 Million to Resolve Allegations of

[TexasTowelie]

Compound Ingredient Supplier Fagron Holding USA LLC to Pay $22.05 Million to Resolve Allegations of False and Inflated Average Wholesale Prices for Ingredients Used in Compounded Prescriptions


WASHINGTON – The Department of Justice announced today that Fagron Holding USA LLC (Fagron) has agreed to pay $22.05 million to resolve allegations concerning the establishment of false and inflated Average Wholesale Prices (AWPs) by its wholly owned subsidiary Freedom Pharmaceuticals Inc. (Freedom) for active pharmaceutical ingredients used in compound prescriptions. Freedom’s pricing scheme caused pharmacies that purchased Freedom’s compound ingredients to submit false prescription claims to the Defense Health Agency, which administers the TRICARE Program for the Department of Defense and the Department of Labor’s Office of Workers Compensation Programs (federal healthcare programs).

“We will not allow the systematic abuse of federal healthcare programs through pricing schemes designed to enrich a few at the expense of federal taxpayers,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “Our commitment to protect these programs extends not only to the pursuit of those that submit fraudulent claims but also those who cause others to submit such claims.”

Compounding pharmacies purchase ingredients or chemicals from ingredient suppliers such as Freedom to prepare and fill compound prescriptions for patients who require a specially made prescription that is not generally available in the marketplace. Freedom knew that compound prescription reimbursement under these federal programs was based in part on the AWPs it reported to various price listing agencies for its ingredients. Freedom knowingly inflated the AWPs for its ingredients in order to increase the reimbursement that its pharmacy customers received from federal healthcare programs for using Freedom’s ingredients. For example, Freedom established an AWP for the ingredient Fluticasone Propionate at $3,500 per gram even though it typically sold the Fluticasone Propionate for approximately $160 per gram.

Freedom promoted its high AWPs and the resulting profit potential from the reimbursement of compound prescriptions as an inducement to pharmacies to purchase its ingredients. Freedom’s fraudulent pricing scheme for its ingredients enabled its pharmacy customers to bill federal healthcare programs thousands of dollars per prescription for some compound formulations.

Read more: https://www.justice.gov/usao-wdtx/pr/compound-ingredient-supplier-fagron-holding-usa-llc-pay-2205-million-resolve

[stopdiggin]

1. anybody threatened with jail time here?

this would seem to be flagrant fraud against the U.S. government. Right?
(I noticed some whistleblowers came away with 4 mill or better. Good!)