. H.R.167 — 118th Congress (2023-2024)
Patient Access to Urgent-Use Pharmacy Compounding Act of 2023Sponsor: Griffith, H. Morgan [Rep.-R-VA-9] (Introduced 01/09/2023) Cosponsors: (10)Committees: House - Energy and CommerceLatest Action: House - 01/20/2023 Referred to the Subcommittee on Health.Saturday, December 23, 2023
Former Owner of New Jersey Marketing Company Sentenced to 15 Months in Prison for Role in $6 Million Compounded Prescription Drug Scheme
Former Owner of New Jersey Marketing Company Sentenced to 15 Months in Prison for Role in $6 Million Compounded Prescription Drug Scheme
For Immediate Release
U.S. Attorney's Office, District of New Jersey
NEWARK, N.J. – The former owner of a New Jersey marketing company was sentenced today to 15 months in prison for his role in a scheme to defraud public and private health benefits programs of over $6 million for the billing of medically unnecessary compounded prescriptions, U.S. Attorney Philip R. Sellinger announced today.
Michael Drobish, 46, of Cedar Grove, New Jersey, previously pleaded guilty by videoconference before U.S. District Judge John Michael Vazquez to an information charging him with conspiracy to commit health care fraud. U.S. District Judge Katharine S. Hayden imposed the sentence today in Newark federal court.
“This defendant exploited the health care system by taking advantage of reimbursements for compounded medications that were enormously expensive but medically unnecessary. This defendant has now been held accountable for his role in the criminal conspiracy. These compounding fraud schemes cause millions in losses to the health care system with zero benefit to beneficiaries. We will continue to combat this kind of health care fraud with our law enforcement partners.”
“The sentencing announced today demonstrate our commitment to investigate individuals who defraud TRICARE, the healthcare system for military members and their families,” Special Agent in Charge Patrick J. Hegarty in the Northeast Field Office of the Defense Criminal Investigative Service, the law enforcement arm of the Department of Defense Office of Inspector General, said. “Schemes to bill TRICARE for medically unnecessary services put our beneficiaries at risk and burden the TRICARE program. We will continue to partner with the U.S. Attorney’s Office and the FBI to protect the integrity of the TRICARE system.”
According to documents filed in this case and statements made in court:
Compounding is a practice in which a pharmacist or physician combines, mixes, or alters ingredients of a drug to create a medication tailored to the needs of an individual patient. The Food and Drug Administration does not approve compounded drugs and thus does not verify the safety, potency, effectiveness, or manufacturing quality of compounded drugs. Generally, a physician may prescribe compounded drugs when an FDA-approved drug does not meet the health needs of a particular patient.
From April 2014 to January 2017, Drobish conspired with others to submit fraudulent prescriptions for compounded medications to public and private insurance plans. The scheme centered on the discovery that certain insurance plans paid for prescription compounded medications – including scar creams, wound creams, and metabolic supplements/vitamins – at exorbitant reimbursement rates.
Drobish hired sales representatives through his marketing company to target individuals who had insurance plans that covered compounded medications. The sales representatives then convinced those individuals to obtain prescriptions for compounded medications, regardless of medical necessity, often by providing them with cash payments. The individuals were then directed to certain telemedicine companies, which the marketing company or its affiliates paid to issue the prescriptions. The prescribing physicians at the telemedicine companies would then write the prescriptions without performing any examination or after deliberately conducting cursory examinations that were insufficient to legitimately deem a compounded drug medically necessary.
Once the prescriptions were written, they were filled by certain compounding pharmacies with which Drobish conspired. The compounding pharmacies would then receive reimbursement from the insurance plans, and would pay Drobish’s marketing company a percentage of the reimbursement amount. Drobish would retain a portion of the payment and provide a “commission” payment to the relevant sales representative.
In addition to the prison term, Judge Hayden sentenced Drobish to three years of supervised release. As part of his plea agreement, Drobish must forfeit $532,650 in criminal proceeds and pay restitution of approximately $6.1 million.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark, and the U.S. Department of Defense Office of Inspector General, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Hegarty, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Jordann Conaboy of the Opioid Abuse and Prevention Unit in Newark.
Updated December 5, 2023
Topic
HEALTH CARE FRAUD
Component
Former Co-Owners of New Jersey Marketing Company Sentenced to Prison in $8.8 Million Compounded Prescription Drug Scheme
Former Co-Owners of New Jersey Marketing Company Sentenced to Prison in $8.8 Million Compounded Prescription Drug Scheme
For Immediate Release
U.S. Attorney's Office, District of New Jersey
NEWARK, N.J. – The former co-owners of a New Jersey marketing company were each sentenced today to 12 months and one day in prison for their roles in a scheme to defraud public and private health benefits programs of at least $8.8 million for the billing of medically unnecessary compounded prescriptions, U.S. Attorney Philip R. Sellinger announced.
Lisa Curty, 46, of Staten Island, New York, and Christine Myers, 38, of Phillipsburg, New Jersey, each previously pleaded guilty by videoconference before U.S. District Judge John Michael Vazquez to separate informations charging them with conspiracy to commit health care fraud. U.S. District Judge Katharine S. Hayden imposed the sentencing today in Newark federal court.
“These two defendants are just the latest in a long line of schemers who took advantage of publicly and privately funded insurance plans, raiding them for millions of dollars in fraudulent reimbursements for compounded medications. We will continue to prosecute those who take advantage of our health care system to generate illicit income.”
“The volume of cases involving compound medication fraud has moved beyond frustrating for law enforcement, with an arrest, conviction or sentencing happening almost every other day in New Jersey,” FBI – Newark Special Agent in Charge James E. Dennehy said. “The fraudsters committing these crimes aren't paying attention to the fact that everyone doing the same thing is going to federal prison. This is the FBI and our law enforcement partners screaming in the town square, you will be next if you continue to break the law.”
“Protecting the integrity of TRICARE, the healthcare system for our military members and their families, is a top priority of the Defense Criminal Investigative Service (DCIS), the law enforcement arm of the Department of Defense Office of Inspector General,” Acting Special Agent-in-Charge Brian J. Solecki, DCIS Northeast Field Office, said. “Schemes to bill TRICARE for medically unnecessary services place a great burden on the TRICARE program. We will continue to work with the U.S. Attorney’s Office and our law enforcement partners to ensure that individuals who engage in fraudulent activity, at the expense of the U.S. military, are investigated and prosecuted.”
According to documents filed in this case and statements made in court:
Compounded medications are specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient. Although compounded drugs are not approved by the Food and Drug Administration (FDA), they are properly prescribed when a physician determines that an FDA-approved medication does not meet the health needs of a particular patient, such as if a patient is allergic to a dye or other ingredients in the prescription.
Between February 2015 and February 2017, Curty and Myers participated in a conspiracy that involved the submission of fraudulent prescriptions for compounded medications to public and private insurance plans. The scheme centered on the discovery that certain insurance plans paid for prescription compounded medications – including scar creams, wound creams, and metabolic supplements/vitamins – at exorbitant reimbursement rates.
Curty and Myers exploited this opportunity by creating a New Jersey marketing company and hiring sales representatives to target individuals who had insurance plans that covered compounded medications. The sales representatives then convinced those individuals to obtain prescriptions for compounded medications, regardless of medical necessity, often by providing them with cash payments. The individuals were then directed to certain telemedicine companies, which the marketing company or its affiliates paid, to receive the prescriptions.
Once the prescriptions were written, they were filled by certain compounding pharmacies with which the marketing company conspired. The compounding pharmacies would then receive reimbursement from the insurance plans, and would pay the marketing company a percentage of the reimbursement amount. As owners of marketing company, Curty and Myers retained a portion of the payment and provided a “commission” payment to the relevant sales representative.
In addition to the prison term, Judge Hayden sentenced the two defendants to two years of supervised release and ordered them to pay $8.2 million in restitution.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge Dennehy in Newark, and the U.S. Department of Defense Office of Inspector General, Defense Criminal Investigative Service, under the direction of Acting Special Agent in Charge Solecki, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Jordann Conaboy of the Opioid Abuse and Prevention Unit in Newark.
Updated December 18, 2023
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