Thursday, June 30, 2016
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Former Pharmaceutical Employee Admits Role In Scheme To Obtain Medically Unnecessary Prescription Compound Medication
Department of Justice
U.S. Attorney’s Office
District of New Jersey
FOR IMMEDIATE RELEASE
Wednesday, June 29, 2016
Former Pharmaceutical Employee Admits Role In Scheme To Obtain Medically Unnecessary Prescription Compound Medication
NEWARK, N.J. – A former pharmaceutical employee today admitted accepting thousands of dollars in exchange for obtaining and filling her own medically unnecessary prescriptions for compounded medication and creams, causing losses of $250,971, U.S. Attorney Paul J. Fishman announced.
Stephanie Naar, 27, of St. Louis, Missouri, pleaded guilty before U.S. District Judge John Michael Vazquez in Newark federal court to an information charging her with conspiracy to commit health care fraud.
According to documents filed in this case and statements made in court:
Naar, a former employee of a New Jersey pharmaceutical company, admitted that in February 2015, she was recruited by an individual identified in the information as “co-conspirator #1 (CC-1),” a former employee of the same pharmaceutical company, to assist a marketing business identified in the information as “Company A.” Company A was paid by various compounding pharmacies for referring beneficiaries whose insurance plans would pay for compounded medication, such as pain creams, scar creams and vitamins.
CC-1 offered Naar “commission” payments in return for compounded medication, creams and vitamins that Naar obtained at specific specialty pharmacies and were billed to her employer’s prescription drug benefit plan. In furtherance of the scheme, Naar received a preprinted prescription form with compounded medications and creams from CC-1, took the forms to her doctor, and asked her doctor to prescribe those medications.
Afterwards, the compounded prescription products were sent to Naar from a pharmacy outside her home state. On March 26, 2015, Naar received a $3,565 check from Company A, which was a percentage of the amount paid by Naar’s employer to the compounding pharmacy for filling the prescription.
During the spring, summer and fall of 2015, Naar refilled her compounded self- prescriptions on forms provided by CC-1 and Company A at certain specific compounding pharmacies selected by Company A, and in return, received commission checks and wire transfers from Company A. Altogether she received $22,445 for her role in the conspiracy.
Naar also admitted that during the Fall of 2015, CC-1 directed her to a “telemedicine doctor” referred to in the information as “co-conspirator #2 (CC-2),” a doctor with whom Naar had no preexisting relationship, for the purpose of obtaining medically unnecessary compounded pain cream so that Company A would provide her continued monetary reimbursements. CC-2 was located in New York and was not licensed in Missouri.
Naar faces a statutory maximum of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Oct 4, 2016.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; and U.S. Department of Defense, Defense Criminal Investigative Service, Office of Inspector General, under the direction of Special Agent in Charge Craig Rupert, with the ongoing investigation leading to today’s plea.
The government is represented by Assistant U.S. Attorney Melissa L. Jampol of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.
U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $1.29 billion in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
Defense counsel: Thomas J. Matthes, St. Louis
The Huffington Post: FDA Must Do More To Ensure Safety Of Compound Drugs 06/30/2016 Rob Sawicki
A growing practice of many pharmacies across the country compounding prescriptions has gone awry, endangering public health, and the Federal Drug Administration (FDA) has a responsibility to crack down on it. read more
Wednesday, June 29, 2016
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| June 22, 2016 | Coastal Meds, LLC. | New Orleans District Office | CGMP/Compounded Drugs/Misbranding | Not Issued * |
| June 21, 2016 | Chongqing Lummy Pharmaceutical Co. Ltd. | Center for Drug Evaluation and Research | CGMP/Active Pharmaceutical Ingredient (API)/Finished Pharmaceuticals/Adulterated | Not Issued * |
| June 16, 2016 | Shanghai Desano Chemical Pharmaceutical Co., Ltd. | Center for Drug Evaluation and Research | CGMP/Active Pharmaceutical Ingredient (API)/Adulterated | Not Issued * |
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Must Read Comment!! See IACP, the essence of compounding has always been tailoring to the individual patient, page 6: http://www.fda.gov/ohrms/dockets/ac/98/briefingbook/1998-3454B1_02_02-TAB1.pdf
Benefit-risk determinations for compounded drugs intended for populations have occurred during public health emergencies with FDA oversight, coordination and other expert input, for example, during pandemic flu for a pediatric dosage form experiencing shortages.
CQA Section 503B provides compounding exemptions to the FFDCA but adds certain public health protections, including FDA-GMP oversight and other requirements for sterile dosage forms intended for populations.
See IACP, the essence of compounding has always been tailoring to the individual patient, page 6: http://www.fda.gov/ohrms/dockets/ac/98/briefingbook/1998-3454B1_02_02-TAB1.pdf
Question of the Day July 23, 2016 61 Members of the House of Representatives signed a letter sent to the FDA urging FDA to Allow for Office-Use Drug Compounding in Pharmacies and claiming to know the intent of the full Congress and appearing to step in to the arena of judicial interpretation of legislation. If this was really the intent of the prior Congress who passed the DQSA why didn't every member who passed the legislation sign a letter to the FDA? Are the members of Congress who signed the letter violating separations of powers' principles? Why or why not?
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