Health care networks accused of multimillion-dollar fraudulent scheme
The dispute stemmed from alleged rampant fraud of the Gilead's Advancing Medication Assistance Program, which provides free medication for uninsured people.
A federal district court in Miami has issued a preliminary injunction in favor of an American biotechnology company that filed a lawsuit against two health care networks for an alleged fraudulent scheme valued in the millions of dollars.
And for lawyers litigating these types of cases, the outcome shows the measures biotechnology companies, such as Gilead Sciences, might have to take to safeguard their drugs and medical products to prevent fraud, and the numerous steps it can take to put a stop to these networks allegedly perpetrating these actions, said Maria D. Garcia, a partner and co-chairwoman of the health care practice at Kozyak Tropin & Throckmorton in Miami who is not involved in this case.
Related: 10 former players charged in $3 million NFL benefits scam
“There has been a breakdown between the actual patients and whether they need this medication and whether this reimbursement is legitimate,” Garcia said. “Gilead is attacking a whole business system these defendants have allegedly created to get these drugs prescribed illegitimately.”
The dispute stemmed from alleged rampant fraud of the Gilead’s Advancing Medication Assistance Program, which provides free medication for uninsured people to prevent them from becoming infected with HIV, according to the complaint, which surfaced Tuesday on Law.com Radar. The defendants are Doctors United and Positive Health, two groups of affiliated and aligned clinics, laboratories and pharmacies.
Geoffrey Potter and Joshua Kipnees, partners at Patterson Belknap Webb & Tyler in New York and lead counsel for Gilead, declined to comment. But in the complaint, they suggested that despite an ongoing pandemic and a national election, a ruling by the U.S. District Court for the Southern District of Florida granting the injunctive relief sought by the plaintiffs will help avert the type of fraud committed against the plaintiff pharmacy company in South Florida.
And just on Tuesday evening, the federal court ordered a 14-day temporary injunction against the defendants, requiring them to turn over their inventories of TRUVADA® or DESCOVY® medication and all related records.
Now, U.S. District Judge Kathleen M. Williams will hold a hearing on whether the court should issue a preliminary injunction, pursuant to Rule 65 of the Federal Rules of Civil Procedure, on Nov. 16.
As of Wednesday afternoon, none of the nearly 60 defendants had attorneys listed on their behalf.
Gilead described in the complaint a recruiting scheme to recruit low-income or homeless people to serve as patients. According to the complaint, these individuals would be prescribed the medication and then take it to pharmacies in the fraudulent medical networks.
The medication would then be repackaged without the Food and Drug Administration-approved packaging and resold at a significantly higher price on the black market. However, the Gilead lawyers stated in the complaint that multiple whistleblowers alerted authorities to the fraudulent scheme.
“The Clinic Defendants encourage recruits to sell their medication, attempting to dissuade them from keeping the medication by claiming that it may have dangerous side effects,” according to the complaint. “Many recruits, who earn little income and need the money, accept the offer.”
Read the complaint:
Gilead has taken steps to stop the ongoing fraud, such as requiring a driver’s license to procure the medication, which could hinder actual homeless patients from obtaining the medication. Many do not have that identification on their person.
Other measures to prevent fraud have failed because the defendants would coach the applicants on how to work around the safeguards. In addition, defendants, to avoid scrutiny, would change their business names and identities.
“Putting an immediate stop to Defendants’ schemes is particularly important given the evidence that Defendants are aggressively expanding their operations in Florida and increasing the scope of their fraud by seeking to open clinics in other states,” Gilead stated in the complaint.
Garcia said she sees these types of cases only increasing in the future.
“The business structures are moving in a direction where many parties are bringing together different interests and come together to treat more patients,” Garcia said. “In this case, that trend is continuing as Gilead Sciences attacks a whole business model.”
Read more: