The Department of Justice filed a complaint last week against a Texas compounding pharmaceutical company for falsely reporting prices of certain ingredients as much as 400 times higher than the actual sale cost.
The DOJ’s complaint, filed under the False Claims Act, alleges Professional Compounding Centers of America Inc. of fraudulently inflating the “Average Wholesale Prices” of ingredients. PCCA claimed the chemical Resveratrol had an AWP of approximately $818 per gram, but the drug was sold to customers for a mere $2 per gram.
“The fraudulent reporting and marketing of drug prices to solicit business will not be tolerated,” Deputy Assistant Attorney General Michael Granston said in a news release. “We will continue to hold accountable those who take improper advantage of federal health care programs.”
The alleged fraud included selling fluticasone propionate for approximately $135 to $197 per gram, then reporting the AWP for the ingredient at an inflated price of $3,630.90 per gram.
The falsely reported prices allegedly aimed to secure a high reimbursement from TRICARE, a federal healthcare program that provides insurance for veterans and active-duty military. TRICARE determines reimbursements for drugs based partly on the AWPs. The inflated AWPs allegedly cost the TRICARE program millions of dollars in unnecessary reimbursements.
The complaint also alleges PCCA offered “all-inclusive travel packages” to those who agreed to purchase ingredients from them, according to the DOJ.
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The complaint was initially part of a lawsuit under the False Claims Act brought by Peter Hueseman, who partly owned a pharmacy that purchased ingredients from PCCA. A provision in the FCA allows individuals to ask the DOJ to intervene in their case.
