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Use of foreign medications generates federal problems
e-Reports, July 13, 2015
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Saving money on foreign drugs proves very costly for physicians Untitled document

In May, a Florida oncologist was charged in a 21-count federal indictment for health care fraud and receiving misbranded drugs. The physician is alleged to have ordered, and directed others to order, drugs from foreign distributors, including QSP and Cancer Drugs Online, as well as drugs from foreign sources not registered with or approved by the U.S. Food and Drug Administration (FDA).

Some of the discounted drugs, which mostly originated in Canada and the United Kingdom, were Abraxane®, Avastin®, Eloxatin®, Foslodex®, Gemzar®, Herceptin®, Neulasta® (foreign: Neulastim), Neupogen®, Procrit® (foreign: Eprex), Treanda® (foreign: Ribomustin), Rituxan® (foreign: MabThera), Taxotere®, Velcade® and Zometa®. Several indicators on the labels advised the drugs were not FDA approved.

These drugs were administered and dispensed to clinic patients without their knowledge or consent to receive misbranded drugs from foreign distributors. The doctor then submitted claims to Medicare for reimbursement, falsely representing that FDA-approved versions of the drugs were administered.

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

If convicted, the Florida physician faces up to three years for each count of receiving misbranded drugs, up to 10 years for each count of health care fraud and a penalty for $700,000 in Medicare proceeds.

In February, a Louisville physician pleaded guilty to criminal charges in a federal case for treating patients with misbranded medications, including Rituxan®, Actemra®, Remicaid®, Aclasta®, Prolia® and Synvisc®. The physician purchased these products from the United Kingdom for a cost considerably less than the FDA-approved versions and submitted claims to Medicare.

The physician was sentenced to a term of one-year probation and ordered to pay $176,915.55 for his criminal charges. In a separate civil agreement, the physician agreed to pay an additional $338,493.30 to settle claims brought against him by the Office of Inspector General.

Advice to avoid trouble
Past ISMA Reports articles have highlighted other similar cases involving foreign drugs and medical devices including chemotherapy drugs, intrauterine devices, Botox and orthopaedic injections. Penalties have ranged from tens of thousands to millions of dollars, and some included prison time.

The FDA cautions that non-FDA approved medications from “foreign or unlicensed suppliers may be from unknown sources, may have unknown ingredients, may be counterfeit,

or may not have been manufactured, transported or stored under proper conditions as required by U.S. law, regulations and standards.”

Under federal law, drugs are misbranded if (for instance):

  • Labeling fails to bear adequate directions for use.
  • Labeling is false or misleading.
  • Labeling contains information not in English.
  • Labeling fails to bear the symbol “Rx only”.
  • Drug was manufactured at an establishment not registered with the FDA.
  • Drug was not annually listed with the FDA as being manufactured for commercial distribution in the U.S.

“Physicians concerned they may have improperly acquired or utilized drugs or devices that were not FDA-approved should contact their private health care attorneys for advice,” said Reed.

Verify the FDA approval of a drug firm and its drugs here.

Additionally, note that wholesalers must be licensed to conduct business in Indiana as Wholesale Drug Distributors. Check a wholesaler’s status at in.gov.

If you have questions, contact the ISMA Legal Department at (800) 257-4762 or (317) 261-2060.

Copyright: Information written and displayed on www.ismanet.org is the property of ISMA and may not be reproduced without expressed written permission of the Indiana State Medical Association.

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