Enforcement actions against compounding pharmacy have been headliners for some time. Today’s post focuses on a last year’s action against a L.A. pharmacy for paying illegal kickbacks to marketers and waiving  patients’ copays.  The pharmacy – Fusion Rx Compounding Pharmacy – was improperly paying two marketers for steering expensive prescriptions to the pharmacy.

According to the government press release, the pharmacy and the marketers provided physicians with preprinted prescription script pads that offered “check-the-box” options to maximize the amount of insurance reimbursement for the compounded drugs. From May 2014 to at least February 2016, Fusion Rx received approximately $14 million in reimbursements on its claims for compounded drug prescriptions.

The government also alleged that the pharmacy was routinely waiving patients’ copays to encourage patients to continue using expensive compounds. After a PBM audit, which discovered this failure to collect copays, the pharmacy owner directed its staff to purchase American Express gift cards to pay for certain copays without the patients’ knowledge.

All four defendants – the pharmacy owner, the pharmacy, and the two marketers pled guilty and are facing a prison term. The pharmacy owner and his business were ordered to jointly pay $4,400,525 in restitution. The pharmacy owner, who also acted as the pharmacist-in-charge, had his license revoked by the California State Board of Pharmacy. While independent pharmacies operate in a very competitive environment, proper review and compliance should be conducted prior to engaging into such practices as copay waiving or preparing pre-printed forms for the prescribers.