Medisca Inc. has agreed to pay $21.75 million to resolve allegations of establishing false and inflated Average Wholesale Prices (AWPs) for two ingredients used in compounded prescriptions, according to the Justice Department. The pricing scheme allegedly led pharmacies purchasing these ingredients to submit false prescription claims to federal health care programs.

Principal Deputy Assistant Attorney General Brian M. Boynton emphasized, "We will not tolerate fraudulent pricing schemes targeting health care programs that support veterans and other federal beneficiaries."

Compounding pharmacies purchase ingredients from suppliers like Medisca to create prescriptions not generally available in the marketplace. It is alleged that Medisca knowingly inflated AWPs for resveratrol and mometasone furoate, resulting in increased reimbursements for its pharmacy customers from federal healthcare programs.

U.S. Attorney Damien M. Diggs for the Eastern District of Texas stated, "The systems establishing federal reimbursements for compounded pharmaceuticals should not be viewed by companies as an opportunity to artificially inflate reimbursements from federal payors such as TRICARE."

U.S. Attorney Jaime Esparza for the Western District of Texas added, "My office is committed to using the False Claims Act (FCA) to hold individuals and companies accountable for the impact their actions have on our critical programs."

Acting Special Agent in Charge Ryan Settle highlighted, "This settlement sends a clear message about the unwavering commitment of the Defense Criminal Investigation Service (DCIS) to protect the integrity of TRICARE."

The settlement resolves claims brought under FCA's whistleblower provisions by Doug McMakin against Medisca. McMakin will receive $3,425,625 from the settlement proceeds.

This resolution was achieved through collaboration between various U.S. Attorneys’ Offices and investigative agencies including DCIS and USPS OIG.

Senior Trial Counsel Sanjay Bhambhani, Trial Attorney John Deck, Assistant U.S. Attorneys Mary Kruger and James Gillingham managed this case with assistance from Special Agents Nicholas Koechig and Timothy Jones.

The claims resolved by this settlement are allegations only; there has been no determination of liability.