According to a Department of Justice press release, the United States has filed a complaint against a compounding pharmacy, alleging that the pharmacy paid illegal kickbacks to induce prescriptions for compounded drugs reimbursed by TRICARE. The government’s\u00a0 claim also charges two pharmacy executives, and a private equity firm which manages both the pharmacy and the private equity fund that owns the pharmacy, for their involvement in the alleged kickback scheme.<\/p>\n
The private equity firm allegedly invested in the pharmacy company in 2012 with the goal of increasing the company\u2019s value and then selling it for a profit in 5 years. The private equity firm allegedly \u201cmanaged and controlled\u201d the pharmacy company through two of its partners who served as \u201cofficers and\/or directors\u201d of the company. During its investment, the private equity firm was allegedly actively involved in developing and implementing the company\u2019s business strategy around maximizing reimbursement so as to enhance the value of the company, prior to selling its interest.<\/p>\n
The complaint describes statements in e-mails sent by the private equity firm principals, about opportunities to capitalize on \u2018the extraordinarily high profitability\u2019 which could result in a \u2018quick and dramatic payback\u2019 on its investment.\u201d According to the U.S. Attorney, the private equity firm acknowledged in emails that \u201c\u2018overcharging the product\u2019 in its \u2018pain management business\u2019 risked \u2018cross[ing] the line from an ethics standpoint.\u2019\u201d<\/p>\n
The take away from this complaint is that private equity investors are not immune from prosecution for health care fraud. Private equity investors need to consider the risks associated with managing and controlling their health care investments.<\/p>\n
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According to a Department of Justice press release, the United States has filed a complaint against a compounding pharmacy, alleging that the pharmacy paid illegal kickbacks to induce prescriptions for compounded drugs reimbursed by TRICARE. The government’s\u00a0 claim also charges two pharmacy executives, and a private equity firm which manages both the pharmacy and the … <\/p>\n