PBM Executive Pleads Guilty to Kickback Allegations

Recently, Douglas M. Pick, former president and CEO of Pharmaceutical Technologies, pled guilty to allegations of involvement with an illegal kickback scheme. The investigation into Pick and other individuals associated with the pharmacy benefit manager (PBM) began in 2013.

While sentencing has not been scheduled, Pick may serve up to 3 years in prison for aiding the scheme that resulted in more than $3.5 million in illegal payments since 2001, according to a press release from FisherBroyles LLP.

The kickback scheme involved Pick and other individuals with ties to employee health benefit plans who needed administrative services for their pharmacy benefit. PBMs, like Pharmaceutical Technologies, act as a middleman in the supply chain and negotiate drug prices for health plans.

When the individuals referred the plans to Pharmaceutical Technologies, Pick then provided them with kickbacks based on the volume of business received, according to the release. The involved parties received the illegal funds in the form of a per-prescription administrative fee. In total, the individuals collected more than $3.5 million over a 12-year period.

These schemes only benefit the companies and individuals involved, while harming taxpayers and driving up drug costs, according to the release.

Not only is the government pursuing companies that are involved with kickback schemes and other fraudulent schemes, they are going after executives as well, the release noted.

In past cases, the government typically only issued a fine to the involved parties; however, now executives who are involved with or facilitate actions that defraud the government will receive fines and/or jail time.

Pharmaceutical Technologies previously entered into an agreement with the United States to pay more than $8.5 million in fines related to the scheme, and to allow the investigation and prosecution of Pick and other related individuals.