DOJ links $500M in fraudulent payments to compounding creams
A week after authorities raided compounding pharmacies in four states, federal investigators now believe compounding creams are the source of half a billion dollars in healthcare fraud, according to the Wall Street Journal.
Department of Justice investigators involved in the fraud probe told the newspaper that Tricare may be the biggest victim of fraud, because the specialty creams were often pitched to veterans and seniors as a safe way to alleviate pain. Last year, Tricare officials said pain and scar creams were linked to more the $300 million in monthly spending on prescription medications, an 800 percent spike from the previous year.
Investigators believe the creams offer no medicinal value even though some companies charge more than $10,000 for a single prescription. Those familiar with the investigation told the WSJ that some pharmacies may have overbilled Tricare by ordering more prescriptions than necessary and automatically refilling prescriptions for patients. Other insurers, such as UnitedHealth Group and Blue Cross Blue Shield, have taken steps to stop paying for compounding drugs after they saw a sharp spike in spending during the first quarter of 2012.
One particular company, World Health Industries Inc. (WHI), which also does business as Aspire Rx, has close ties to former NFL Hall of Fame quarterback Brett Favre, according to the WSJ. Favre served as the company's pitchman for a cream called Rx Pro that he claimed "was a safe way to treat some of your ailments." Investigators are also looking into a business called 3B Medical Group LLC, which Favre created with his agent, and Bryon Barrett. Authorities believe 3B served to market the creams produced by WHI and Opus Rx LLC, companies created by Barrett and his brother Chad Barrett. Both Opus Rx and Aspire Rx were part of last week's raids.
At the beginning of the month, Opus Rx and several other companies under investigation filed for bankruptcy protection, according to the WSJ. In last week's raid, investigators seized $15 million in assets from the compounding companies.
To learn more:
- read the Wall Street Journal article