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Justice Department accuses drug company of inflating prices

It's believed the TRICARE health care program for military members lost hundreds of millions of dollars in insurance claims.
Credit: burdun - stock.adobe.com

WASHINGTON D.C., DC — A pharmaceutical company in the business of selling active drug ingredients and other products to compounding companies is accused of reporting fraudulent and higher than average prices for its ingredients.

In turn, the companies that purchased those products at higher prices submitted inflated compound prescription claims to the federal health care program for military members and their families, according to the Department of Justice.

Prosecutors say Houston-based Professional Compounding Centers of America Inc. knowingly reported inflated average wholesale prices for its ingredients.

The chemical fluticasone propionate averages $135-$197 per gram, for example, the DOJ said in a news release. But in 2014, it's alleged PCCA sold it for $3,630.90 per gram. Another drug was allegedly sold at 400 times its actual selling price.

Compounding companies then purchase the ingredients, with the higher than average claims sent to the federal health care program TRICARE that services active and retired military personnel, including dependents.

"We diligently investigate fraud on the federal healthcare system, especially where it impacts our veterans and their families," said U.S. Attorney Ashley Hoff for the Western District of Texas in a statement. "We will continue to guard the system so patients receive the care they deserve and federal taxpayer dollars are not wasted."

It's believed there are tens of thousands of false and fraudulently inflated compound prescription claims containing ingredients sold by PCCA that have been sent to TRICARE. The DOJ says that costs the health care program hundreds of millions of dollars.

Prosecutors allege PCCA offered other incentives to pharmacy customers, including all-inclusive travel packages, in exchange for their business.

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