Supply chain criminals who infiltrate pharmacies in order to perpetrate non-controlled prescription drug diversion schemes have had the upper hand for years. The primary culprit behind this sobering reality is the historical lack of oversight from resource-strapped state pharmacy boards. To make things worse, states have been forced to take an all-hands-on-deck approach in response to the nation’s devastating opioid crisis and concerns over potential compounding abuses in the aftermath of the NECC catastrophe.
Nevertheless, there is some good news to report. An institutional pharmacy in Pennsylvania had its diversion scheme thwarted, thanks in large part to the efforts of FDA’s Office of Criminal Investigations. According to a recent U.S. Department of Justice press release, Gino Cordisco, the former Vice President of Store Operations for Med-Fast Pharmacy, Inc., was charged with a single conspiracy count “related to his participation in a scheme to fill prescriptions for nursing homes with recycled unused drugs that were commingled with drug stocks on hand at Med-Fast’s Institutional Pharmacy.”
In a parallel civil False Claims Act settlement, Med-Fast Pharmacy Inc., its owner Douglas Kaleugher, and related entities have agreed to pay the United States more than $2.6 million. The civil settlement resolved two separate whistleblower allegations that Med-Fast submitted improper Medicare claims for medications it “had either recycled from long-term care facilities serviced by its institutional pharmacy, or that otherwise differed from the medications identified as part of the claims submitted to the United States.” The settlement also resolved allegations related to a diabetic test strip diversion scheme by Med-Fast.
This case is likely just the very tip of a wide-ranging institutional pharmacy drug diversion scheme iceberg. Although state oversight of pharmacies on supply chain security issues is unlikely to dramatically improve anytime soon, FDA can fill the gap once it decides to make its presence felt. For instance, there are numerous criminal cases on the OCI web site that can be used by FDA to improve awareness among pharmacy associations and other stakeholders about non-controlled prescription drug diversion and counterfeiting schemes involving pharmacies. These outreach efforts have the potential to dramatically improve detection and reporting of pharmacy diversion schemes like the one described above. While this approach is overly simplistic, it has the potential to build coalitions that may eventually lead to novel solutions. However, FDA needs to takes the first step in order for this to happen.