Smart Pharmacy, Inc., SP2, LLC and owner Gregory Balotin have settled a False Claims Act lawsuit for at least $7.4 million. The Justice Department alleged that the pharmacies “violated the False Claims Act by adding the antipsychotic drug aripiprazole to topical compounded pain creams to boost reimbursement and by routinely waiving patient copayment obligations.”

Case background

Aripiprazole is sold under the names Abilify, Abilify Maintena and Aristada. This drug is approved to treat psychological conditions including schizophrenia and Tourette’s. The government accused Balotin’s pharmacies of crushing aripiprazole pills, which were meant to be used orally, and included them in compounded topical creams for pain relief. The government further alleged that there was no clinical basis to do so: the defendants included the drug in pain creams to increase profits on Medicare Part D and TRICARE prescriptions.

Furthermore, the Justice Department alleged that the defendants waived patient copayments to encourage patients to accept those pain cream prescriptions. While copays can be waived on the basis of financial hardship and other specific situations, the defendants did so without regard to patient need.

Balotin has agreed to submit to a three-year integrity agreement with the Department of Health and Human Services Office of Inspector General (HHS-OIG), including an annual independent claims review.

The lawsuits were originally filed in U.S. District Court by two former employees of Smart Pharmacy under the whistleblower provisions of the False Claims Act. This permits the federal government to intervene, and the whistleblowers to share in any recovered proceeds. At this time, the whistleblower share of the settlement has yet to be determined.

When you witness wrongdoing at your job, you may be eligible to file a whistleblower suit. A knowledgeable whistleblower attorney at Kardell Law Group can help when you call today.