Long-Term Care Pharmacy Fraud

Pharmaceuticals available to be recycled are abundant; patients abandon their medications due to death, their prescriptions are changed, and a multitude of other reasons.

Most nursing home residents are on 10-20 medications a month. Instead of disposing the medication, a few long term care pharmacies actively recycle them. In order to recycle the pills/tablets are removed from blister packs by hand, often in an unsterile environment. Once the pills/tablets are removed, there are no identifiable lot numbers or expiration dates available to associate with each pill.

Expiration dates are determined by stability assessments that follow scientifically based technical procedures that have been approved by the FDA. Expiration dates only apply when the drug product is stored in the manufacturer’s original, unopened container under defined conditions. The expiration dates associated with pills and tablets that sit exposed in large, dirty bins/buckets, for multiple days, are not reliable. These pills and tablets often recycled into successive blister packs for use by second (and possibly third or fourth) patients are subject to degradation and spoilage, putting the patient who takes them at risk.

From a legal standpoint, the pharmaceuticals become “adulterated” (due to degradation etc.) and/or “misbranded” (lots mixed up, false expiration dates, etc.), with resulting pharmaceutical fraud. The law forbids distribution in interstate commerce of drugs that are “adulterated.” A drug is adulterated if it is represented as a drug of the name of which is recognized in an official compendium, and its strength differs from, or its quality or purity falls below, the standard set forth in such compendium.

While in certain limited circumstances, specially packaged unused drugs paid for by Government Healthcare Programs can be returned to long-term care pharmacies and resold, such returns and resales must be consistent with provisions of federal and state law, and the pharmaceuticals cannot be adulterated. If the pharmaceuticals are adulterated or repackaged in violation of other federal law, or state law, then the claims for such pharmaceuticals may be submitted in violation of the False Claims Act.

Potential whistleblowers with knowledge of Medicare fraud involving long-term care pharmacies may be confronted with this not too uncommon unfortunate situation.

REAL PEOPLE making real change Meet Some of our Heroes

Kathleen Hawkins

Dignity Health
$37 million

Kathleen Hawkins, RN MSN, had been employed by Defendant, Catholic Healthcare West (CHW) for approximately 6 years when she decided she had had enough of trying to change the hospital system from within.

CHW, a California not-for-profit corporation that operated hospitals in California, Arizona, and Nevada, was at the time the eighth largest hospital system in the nation and the largest not-for-profit hospital provider in California.

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Joe Strom

Johnson & Johnson
$184 Million

Joe Strom contacted us in 2005. We were very grateful that he did. We immediately formed an all-star legal team and a process to stop a very harmful pharmaceutical marketing strategy. It was this process we set into motion that ultimately returned hundreds of millions of dollars to the U.S. Treasury, and a portion of that, very well-deserved, into Joe’s bank account.

Joe told us a very troubling story about the off-label promotion of a pharmaceutical drug for patients who already suffered from chronic heart failure.

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Bruce A. Moilan Sr.

$27 Million

Bruce Moilan was a seasoned hospital systems expert by the time he contacted our Firm. At the time he decided to file his qui tam lawsuit, he was employed by South Texas Health System as a System Director for Materials Management. In this position, he oversaw $24 million in annual purchases of supplies and equipment and helped determine budget, reduction and cost analysis throughout the contract bidding and negotiations process. His job was to insure proper implementation for purchasing, receiving and management of inventory, for McAllen Hospitals, L.P.

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“I collaborated with Nolan, Auerbach and White on a broad variety of cases where whistleblowers stepped forward to disclose tactics employed by large companies to influence physicians' medical decision-making in patient care. They provide ample resources to not only optimize their client cases, but in doing so consistently leverage best medical evidence to further patient safety and resource utilization.”

— Fred Polsky M.D., Former Medical Director, CMS Zone 7 Integrity Contractor

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