For years, a Georgia pharmacy ran a lucrative scheme, government prosecutors alleged. It skirted federal restrictions on the sale of compounded pain creams to members of the U.S. military’s health system, making millions of dollars in profits.
Prosecutors said the drugs were compounded in mass quantities and peddled by sales agents equipped with pre-printed prescription pads. To boost sales, the government alleged, the company used a fake charity and other ruses to waive required co-pays, then billed the government at exorbitant rates. At times, a product sold to cash-paying patients for $30 was billed to the government at more than $600.
Now, that company, DermaTran Health Solutions, an insurance company and others accused of defrauding the government will pay more than $6.8 million to settle the civil case, without admitting liability. A whistleblower who brought the case to the government’s attention will receive about $1.4 million of that amount.