The U.S. Justice Department has accused a Houston-based company of inflating the price of ingredients for prescription drugs sold by pharmacies to TRICARE, a federal health care program for military members, retirees and their dependents.
Professional Compounding Centers of America Inc. (PCCA) allegedly inflated the cost of the ingredients up to 400 times the actual selling price, the press release said. The Justice Department filed a complaint under the False Claim Act against the company. Such allegations demonstrate the government’s role in putting an end to healthcare fraud and corruption.
“The fraudulent reporting and marketing of drug prices to solicit business will not be tolerated,” said Deputy Assistant Attorney General Michael D. Granston of the Justice Department’s Commercial Litigation Branch in the Civil Division. “We will continue to hold accountable those who take improper advantage of federal health care programs.”
Compounding pharmacies buy ingredients for drugs from suppliers such as PCCA for use in creating compound drugs. According to the Justice Department, pricing is determined based on Average Wholesale Prices (AWP) submitted for each ingredient. TRICARE determines the amount pharmacies are reimbursed for prescription claims based on the AWP reported.
“PCCA typically sold the chemical Fluticasone Propionate to its top customers for between approximately $135 and $197 per gram, but it reported an AWP for that ingredient of $3,630.90 per gram – approximately 18 to 27 times the actual selling price," the press release said. "That same year, PCCA typically sold the ingredient Resveratrol to its top customers for under $2 per gram but reported an AWP of $818.68 per gram, more than 400 times the actual selling price of the ingredient.”
The inflated costs allegedly reported by PCCA "caused its pharmacy customers to submit tens of thousands of false and fraudulently inflated compound prescription claims containing PCCA ingredients to TRICARE, costing the program hundreds of millions of dollars in excess reimbursement," the press release said.
