The United States Department of Justice (DOJ) has focused its attention on healthcare providers in the past decade with increased frequency. Almost weekly, the DOJ touts another splashy settlement or prosecution related to rogue physicians or inappropriate pharmaceutical kickbacks. But, increasingly, federal prosecutors are turning their attention to pharmacies and pharmacists. In this article, we detail some of the recent enforcement efforts, as well as outline some proactive strategies for compliance. The message is that, now more than ever, an ounce of prevention is worth a pound of cure. 

Recent Developments
While the types of prosecutions vary, a few types of pharmacy-related prosecutions stand out and are suggestive of broader trends. We describe a few of the more notable trends.

Primarily over the past few years, there have been a number of civil and criminal prosecutions related to improper dispensing of compounded medications. These prosecutions are largely tied to the dramatic increase in claims submitted to the TRICARE program, with some estimates noting that TRICARE incurred more than $2 billion in allegedly fraudulent compounded medications.1 From coast to coast, DOJ has brought enforcement actions against pharmacies, pharmacists, marketers, doctors, and—in some cases—patients for their role in obtaining these purportedly unnecessary medications. For example, in the recent 'National Health Care Fraud Takedown' Day in June 2018, DOJ prosecutors arrested numerous pharmacy employees, including a pharmacy operations manager, for their role in distributing compounded medications that were allegedly never “purchased or distributed to beneficiaries.”2 Increasingly, DOJ is turning its sights to compound medication schemes that targeted private insurance companies and not just TRICARE. 

Similarly, and in response to the national opioid crisis, DOJ has been increasingly taking pharmacies to task for their role in allegedly contributing to the opioid epidemic. For example, last month in California, DOJ prosecutors announced a False Claims Act settlement with a local pharmacy for allegedly failing to keep accurate records associated with pharmaceutical fentanyl, oxycodone, and hydrocodone.3 Individual pharmacists continue to be arrested when they allegedly improperly seek to divert opioids for their own use, with recent high-profile prosecutions in New York4 and Connecticut.5

To be sure, DOJ’s actions are not solely focused on smaller, local pharmacies. Larger pharmacy retailers too have faced the wrath of DOJ’s enforcement activities. In late June 2018, one major retail pharmacy agreed to pay $1.5 million for its alleged failure to report the loss or theft of controlled substances. That settlement was dwarfed by a pair of multimillion dollar settlements in late 2017: first with DaVita Rx for $64 million, for its role in allegedly billing for prescriptions that were never sent to patients, and then, just days later, a settlement with K-Mart Corporation for $32 million, for its role in allegedly overbilling the federal government for generic prescription drugs. 

The import is clear—DOJ is paying attention to pharmacies and pharmacists. Now, more than ever, pharmacies and employees would be well-served by heeding to tried and true compliance strategies. We offer a few recommendations below.

Suggestions for Proactive Compliance      
While no compliance program can ensure that the government will not ask questions later, a few prudent suggestions are worthy of mention. In particular, as former prosecutors who focused on pharmacy-related fraud when we were in government, we believe the following suggestions—if implemented properly—would go a long way to blunting any government inquiry.
  • All pharmacy employees—from pharmacists to sales representatives to operations managers—should be routinely trained on basic fraud and abuse laws. In addition, employees should be reminded about the particular documentation requirements with respect to controlled substances. 
  • We recommend that pharmacies—no matter how big or small—establish an anonymous hotline tip program where employees or others can report suspected wrongdoing. Some estimates suggest that companies with anonymous hotline tips are 3 times more likely to hear of allegations of wrongdoing than those without such hotline numbers. 
  • Pharmacies would be well-served by doing their own data-mining to review for suspicious orders or prescriptions. While this is required for controlled substance dispensing, we believe this to be a best practice for all prescriptions dispensed. For example, pharmacies should look at trends related to prescribing doctors—if a doctor is an outlier with respect to certain prescriptions, ask questions and understand these aberrances before continuing to dispense medications. 
  • Lastly, we remind pharmacies that documentation is critical. As some of the recent settlements and prosecutions suggest, many alleged violations stem from the failure of pharmacies to keep diligent records. We recommend pharmacies review their documentation protocols, and continuously audit to ensure that records are being kept in an organized and accessible fashion.
In this era of regulated medicine, we recommend pharmacies and their employees be mindful of the regulatory risks. Those that will be most successful in heeding clear of DOJ scrutiny will likely be the pharmacies that recognize these regulations as opportunities for continuous improvements, rather than simply hurdles and hindrances. 
 

A. Lee Bentley, III is the former United States Attorney and Jason Mehta is a former federal prosecutor, both for the Middle District of Florida. During Bentley’s tenure as U.S. Attorney, his office recovered more than $1.8 billion in healthcare fines ,and penalties.  Mehta personally recovered nearly a quarter of a billion dollars in fines, and penalties. Bentley and Mehta now are partners in the Government Enforcement and Investigations Practice Group at Bradley Arant Boult Cummings LLP in Tampa, Florida. They advise pharmacies and other companies and individuals facing government inquiries and investigations.

References
  1. Tampa Pharmacy Charged With Overbilling Military Health Program. Wall Street Journal. https://www.wsj.com/articles/tampa-pharmacy-charged-with-overbilling-military-health-program-1499108462. Published July 3, 2017. Accessed July 30, 2018.
  2. Five NW Alabama Compounding Pharmacy Employees Charged in Multi-Million Dollar Prescription Fraud Conspiracy during National Health Care Fraud Takedown. US DOJ website. https://www.justice.gov/usao-ndal/pr/five-nw-alabama-compounding-pharmacy-employees-charged-multi-million-dollar. Published June 28, 2018. Accessed July 30, 2018.
  3. Lakeside Pharmacy Pays $75,000 for Failing to Keep Accurate Records of Opioids. US DOJ website. https://www.justice.gov/usao-sdca/pr/lakeside-pharmacy-pays-75000-failing-keep-accurate-records-opioids. Published June 27, 2018. Accessed July 30, 2018.
  4. Two Defendants Arrested For Distribution Of Controlled Substances Through Sham Internet Pharmacy. US DOJ website. https://www.justice.gov/usao-sdny/pr/two-defendants-arrested-distribution-controlled-substances-through-sham-internet. Published June 27, 2018. Accessed July 30, 2018.
  5. Former Norwich Pharmacist Charged with Forging Prescriptions to Acquire Oxycodone and Alprazolam. US DOJ website. https://www.justice.gov/usao-ct/pr/former-norwich-pharmacist-charged-forging-prescriptions-acquire-oxycodone-and-alprazolam. Published June 28, 2018. Accessed July 30, 2018.