PBM & Pharmacy Fraud

Becoming a Whistleblower and exposing PBM & pharmacy fraud helps ensure that precious healthcare resources are used as intended. Whistleblowers have uncovered schemes between pharmaceutical companies, pharmacies and pharmacy benefit managers that cost the healthcare system billions of dollars. Whether illegal kickbacks to insurance companies, shorting prescriptions, switching prescriptions for improper reasons, or a host of other schemes, Whistleblowers have helped to correct these unacceptable behaviors through their actions.

As gatekeepers to the pharmaceutical companies, Pharmaceutical Benefit Managers (“PBMs”) were to assist in reducing the costs of drugs for their clients — private insurance companies, Medicaid and Medicare. PBM’s earn billions of dollars for their services, but their close relationship with pharmaceutical companies has led to major whistleblower fraud recoveries.

Responsible for dispensing medication to patients, pharmacies often actually execute the fraudulent schemes based on relationships established between various parties, including PBMs, insurance companies and pharmaceutical companies. PBMs also own and operate specialty, retail & online pharmacies.

PBM fraud and pharmacy fraud typically involve some combination of the following:

  • illegal rebate and discount agreements with pharmaceutical manufacturers;
  • offering kickbacks to insurance companies or healthcare providers;
  • violating contractual responsibilities by shorting prescriptions;
  • switching patients’ prescriptions so as to receive a kickback or for other improper reasons;
  • canceling prescriptions to conceal failures to meet contractually mandated deadlines for filling prescriptions;
  • charging Medicaid or Medicare patients a higher rate than others for the same prescription; and
  • falsely reporting drug research grant information to government agencies.

PBM and pharmacy fraud resulting in whistleblower rewards include:

Medco Paid U.S. $155 Million to Settle False Claims Act Cases

The whistleblowers in the case received $23 million for helping the government uncover allegations that Medco:

solicited & accepted kickbacks from pharmaceutical manufacturers to favor their drugs; and

paid kickbacks to health plans to obtain business.

CVS Caremark Agrees to $36.7 Million Settlement for Overbilling

​The whistleblowers in the case received $4.3 million for helping the government uncover allegations that CVS Caremark illegally substituted a more expensive capsule form of the drug instead of the prescribed tablets to increase its Medicaid reimbursement.

Omnicare to Pay $49.5 Million to U.S. & 43 States to Settle Medicaid Prescription Drug Related Fraud Allegations

The whistleblowers in the case received $7.2 million for helping the government uncover allegations that Omnicare substituted different versions of prescribed drugs, such as tablets for capsules, solely to significantly increase the cost and profit rather than for any legitimate medical reason.