Michigan-based pharmacist Riad “Ray” Zahr and two specialty pharmacies that he “formerly owned and operated” will pay the U.S. $1 million “to resolve allegations that they submitted false claims for the drug Evzio,” according to a December 8 U.S. Department of Justice (DOJ) press release. The civil settlement resolves a whistleblower’s allegations, and as part of the settlement the whistleblower will be awarded a share of the government’s recovery.
The press release states that “Evzio was the highest-priced version of naloxone on the market, and insurers frequently required the submission of prior authorization requests before they would approve coverage for Evzio.” The U.S. alleged that between August 1, 2017 and June 30, 2019, “Plymouth Towne Care Pharmacy dba People’s Drug Store (People’s Drug Store) and Shaska Pharmacy LLC dba Ray’s Drugs (Ray’s Drugs) submitted false claims for Evzio to Medicare.” Allegedly, the People’s Drug Store and Ray’s Drugs “submitted false and misleading prior authorization requests for Evzio that contained clinical assertions for which the pharmacies lacked any factual bias.”
The press release states that Zahr and the two pharmacies “initiated Evzio prescriptions based on rudimentary patient lists with only basic biographical details. Zahr and the pharmacies also included assertions in Evzio prior authorization requests purportedly authored by prescribing physicians regarding the comparative effectiveness of Evzio that the pharmacies or Zahr actually authored. The prescribing physicians did not review, sign or submit the prior authorizations at issue.”
The $1 million settlement also resolves claims that Zahr and the two pharmacies “dispensed Evzio prescriptions to Medicare beneficiaries at times without collecting or attempting to collect co-payment obligations for Evzio, in violation of the Anti-Kickback Statute.”
The whistleblower in this case is Rebecca Socol, who formerly worked for Evzio manufacturer kaléo Inc. Socol filed the claims under the qui tam provisions of the False Claims Act, which allow private individuals to file lawsuits on behalf of the U.S. government if an individual or company is defrauding the government. For her involvement in this case, Socol will receive $200,000.
Socol was awarded $2,548,600 in November when kaléo Inc. entered into a $12.7 million settlement with the DOJ. The settlement resolved allegations that the company “caused the submission of false claims” for Evzio.
Officials commenting on the Zahr, People’s Drug Store, and Ray’s Drug Store settlement in the press release mentioned how abuse of federal medical programs disadvantages taxpayers and sows distrust in said programs. “Taxpayers pay a huge amount of money for federal health care programs, and they expect that money will be spent honestly and effectively – especially when it comes to expensive therapies,” said Acting U.S. Attorney Nathaniel R. Mendell for the District of Massachusetts. “Our job is to find and stop misconduct like this, which hurts those programs and cheats us all.”
“When health care providers put their own financial gain above honest billing of Medicare, they violate the basic trust the public extends to health care professionals,” said Special Agent in Charge Phillip M. Coyne of the U.S. Department of Health and Human Services, Office of the Inspector General (HHS OIG).
Special Agent in Charge Joseph R. Bonavolonta of the FBI Boston Division added, “Pharmacies that take shortcuts to increase their profits by submitting false claims for expensive drugs increase medical costs for all of us…Today’s settlement should deter anyone thinking about abusing our federal health care programs that so many rely on for their health care needs.”
