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Physicians to pay $4.25 million for allegedly using misbranded, unapproved Canadian drugs
e-Reports, July 22, 2013
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The May 13 issue of ISMA Reports told you how physicians across the country have faced legal action on state and federal levels for utilizing foreign, non-FDA approved drugs.

New report shows online drugs pose serious threat
A report released just this month by the U.S. Government Accountability Office (GAO) highlights the extent of the problem of rogue Internet pharmacies operating abroad and illegally shipping unapproved drugs to the U.S. They sell those drugs without a valid prescription, even controlled substances, which no online pharmacies are approved to sell.

The GAO was advised that more than 34,000 active rogue Internet pharmacies existed as of April 2013. They are often complex, global operations with thousands of related websites and components in several different countries.

The drugs these bogus companies sell include counterfeit, misbranded and adulterated products. Often, the dietary supplements they provide come with prescription drug ingredients, in violation of federal law.

Your patients may obtain medications from these suppliers without a prescription. Although some online pharmacies require completion of an online questionnaire, they often ignore that information to complete a purchase.

Finally, note that rogue pharmacies are effective in disguising the nature of their business. Don’t be duped by fraudulent displays of trademarks on websites or logos for payment processors like MasterCard or PayPal.

Read the GAO report here.

Now, a new federal case has resulted in agreements between three Tennessee physicians and the U.S. Department of Justice (DOJ) for a combined amount of $4.25 million, including interest, to settle allegations they used non-FDA approved chemotherapy drugs.

“Non-FDA approved foreign medical devices and medications are illegal and could subject you to severe legal, financial and licensing sanctions,” said Julie Reed, ISMA general counsel. “Purchasing these products also poses a significant risk to the health and safety of your patients.”

In addition to applicable federal laws, Indiana has food and drug and deceptive consumer sales laws to protect citizens.

Last November, 350 medical practices, including four in Indiana, received cease and desist letters from the FDA because they had acquired medications from Canadian suppliers. The safest practice is to purchase products directly from U.S. manufacturers or their authorized representatives.

More on the recent case
The DOJ has alleged the Tennessee physicians violated the Federal False Claims Act by knowingly submitting or causing the submission of false claims to various government health benefits programs – after administering the misbranded, non-FDA approved chemotherapy drugs to patients.

The physicians obtained the drugs from a Canadian distributor at significantly lower rates than available from U.S. manufacturers and distributors registered and approved by the FDA.

To settle the civil suit, the physician who served as the managing partner agreed to pay $2.55 million, while the two physician minority partners each agreed to pay $850,000. The chemotherapy drugs allegedly used included: Abraxane®, Alimta®, Avastin®, Eloxatin®, Gemzar®, Herceptin®, Rituxan®, Taxotere®, and Zometa®.

The managing partner also faced criminal charges on top of the civil allegations. In 2012, he pleaded guilty to receiving misbranded drugs with the intent to defraud or mislead in violation of the Federal Food, Drug and Cosmetic Act. On June 10, he was sentenced to 10 years in federal prison and will be on the federal health care program exclusion list for the next 10 years.

A warning and some advice
U.S. Attorney Bill Killian warned in a DOJ press release, “Medical practices that administer prescription drugs from non-FDA approved foreign sources are putting patients at risk of exposure to counterfeit, contaminated, ineffective and potentially dangerous medications. This case is an example of the efforts the government will continue to make to minimize the chance of patients receiving such unsafe medication, as well as to ensure that Medicare and other health benefit programs do not pay for unapproved drugs.”

To conduct business in Indiana, a wholesaler must be licensed in the state. You can verify licensure here.

Contact your private health care attorney with any concerns related to the federal fraud and abuse or state laws. For attorney referrals, contact the ISMA Legal Department at (800) 257-4762 or (317) 261-2060.

Illegal Drugs

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