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Plan Sponsor ALERT: Reverse Auction Procedure Does Not Protect States from PBM Abuse

In September 2018, New Jersey Governor Phil Murphy announced that the State of New Jersey awarded the Pharmacy Benefit Manager (PBM) contract to OptumRx and agreed to pay OptumRx $6.7 billion over three years to manage and administer pharmacy benefits for the State. Although "reverse auction" is a step in the right direction, such procedure is meaningless unless Plan Sponsors implement contractual tools that protect themselves from PBMs' revenue tactics...

Pharmacy ALERT: Prime Therapeutics Raises Its Standards on Off-Label Claims

Recently, Prime Therapeutics (Prime) announced that its member pharmacies should only dispense prescriptions with dosage strengths and routes of administration that are consistent with manufacturer prescribing information. Prime also now further requires that the pharmacies should anticipate providing scientific evidence demonstrating the efficacy and safety of the prescriptions. Such onerous document requests by Pharmacy Benefit Managers (PBMs) have been prevalent with respect to Medicare Part D claims. In fact, it...

$4 Million Settlement Latest in Growing Trend of Patient Assistance Program Scrutiny

On November 20, 2019, The Assistance Fund (TAF) agreed to pay a $4 million settlement and enter a three-year integrity agreement, to resolve allegations of False Claims Act violations related to paying impermissible kickbacks to Medicare beneficiaries. This represents the third settlement involving a patient assistance fund in the past month, indicating a trend in enforcement action. TAF operated assistance programs to assist patients, including Medicare beneficiaries, with co-payment, co-insurance,...

U.S. Attorney Announces Indictment and Arrest of New York Ophthalmologist for Healthcare Fraud

On November 22, 2019, the United States Attorney Office for the Southern District of New York (USAO) announced that an ophthalmologist with practices in New York and Connecticut has been indicted for healthcare fraud. The USAO also filed a civil fraud complaint against the physician and his medical practice under the False Claims Act.  The indictment alleges that between 2010 and 2017, the physician engaged in fraudulently billing patients, Medicare,...

States Reach Settlement with Reckitt Over Allegations of Improper Marketing of Suboxone

On October 23, 2019, the New York Attorney General's Office announced that New York and other states have reached a civil settlement agreement with Reckitt Benckiser Group (Reckitt) to settle allegations that the pharmaceutical distributor improperly marketed and promoted Suboxone (approved opioid addiction treatment) resulting in improper expenditure of Medicaid funds. Reckitt agreed to pay $700 million to settle the allegations, including those it settled with the U.S. earlier this...