Bergen Unit Settles Fraud Charges
Hawaii officials said they settled for $4 million allegations involving wrongful recycling of prescription drugs and overbilling by Interstate Pharmacy Corp., a unit of drug distributor Bergen Brunswig Corp.
Interstate Pharmacy overcharged patients in nursing homes for prescriptions that were paid for by the state’s Medicaid program, according to the office of Hawaii Atty. Gen. Earl I. Anzai. The pharmacy company also retrieved unused pills from the nursing homes and illegally recycled them to patients, officials said in Honolulu.
Orange-based Bergen Brunswig acquired Interstate Pharmacy along with PharMerica Inc. in 1999.
Interstate Pharmacy “virtually institutionalized the illegal practices long before Bergen took control,” Hawaii officials said in a news release.
Bergen said in a statement that its executives believe the “alleged irregularities” represent “an isolated incident” and “we are doing everything possible to assure that this type of situation never occurs again.”
By splitting a doctor’s monthly prescription into three or four different ones, Interstate Pharmacy could charge multiple dispensing fees of as much as $5 a transaction, said Dewey H. Kim Jr., a supervisor in the attorney general’s Medicaid investigations division. “Some patients were getting five or six medications at a time, so it adds up to quite a bit of money,” he said.
Interstate Pharmacy’s practices also raise safety concerns, Kim said. That is because patients and doctors had no way of knowing expiration dates of medications that were recycled and repackaged by the company. Nor would those repackaged medicines be identifiable in the event of a recall by a drug maker or the Food and Drug Administration.
The fraud investigation was spurred by two former Interstate Pharmacy employees who will share in the settlement under Hawaii’s new False Claims legislation, said their attorney, Thomas R. Grande. The employees filed a suit against the company last month in state court in Honolulu. Hawaii officials said the settlement is the largest ever in the state for medical fraud.
A criminal investigation into suspected wrongdoing by current and former employees of Interstate Pharmacy continues, said Michael L. Parrish, a deputy attorney general.
