FL: Gilead nets $33M in settlement over yearslong HIV drug fraud case in Florida

Healthcare Facilty Rx Drug Diversion – Healthcare Fraud

Gilead Sciences is making serious headway on prosecuting Florida clinics that exploited its access program for HIV prevention drugs.

In the latest twist in a yearslong case, Gilead has settled with healthcare clinic Well Care and certain executives for $33 million, a court filing shows. Gilead filed its original lawsuit against more than 50 Florida healthcare clinics, prescribers, medical laboratories and pharmacies back in 2020.

At the time, the company said the defendants established a scheme to recruit homeless or low-income people in Florida to seek fraudulent preexposure prophylaxis (PrEP) prescriptions through the company’s free-drug access program. Then the participating clinics pocketed reimbursement payments, Gilead argued, and often took the medicines back to repackage them and sell them on the black market.

The scheme
The 225-page complaint, filed in the U.S. District Court for the Southern District of Florida, alleged that the two networks recruit homeless and low-income individuals who could financially qualify for the company’s MAP, even though PrEP may not be medically necessary or appropriate for them.

The clinics give the individuals a “wellness check,” which one whistleblower told Gilead is “a joke,” and prescribe the PrEP regimen. The networks then seek reimbursement from Gilead for the drugs and for administering them. As part of that process, they certify that the prescriptions are needed and appropriate.

Although the MAP reimburses Gilead’s PrEP drugs at the wholesale acquisition price – currently $1,800 per bottle – several of the defendant clinics purchase the drugs at steeply discounted 340B prices. Before giving the drugs to the recruits, the clinics have them repackaged in generic bottles, in violation of federal law and regulations. They then offer to buy the drugs back from the recruits for a paltry sum, so they can stockpile the drugs to be sold on the black market or return them to their pharmacy partners to be dispensed to another recruit for a second reimbursement for the same bottle of drugs, according to the complaint.

Gilead also alleged that the clinics often pay the same recruits to go to different clinics in the network to get multiple PrEP prescriptions
that are then submitted to Gilead for reimbursement. As a result of the “dangerous and fraudulent schemes,” the networks have stolen
tens of millions of dollars from Gilead, the company alleged.

Gilead said it first became aware of the schemes when it noticed that certain clinics “were prescribing enormous volumes of PrEP medication to a suspiciously large number of individuals whom they had enrolled in the MAP. This output was grossly disproportionate relative to other healthcare providers in Florida and elsewhere.” Consistent reports of fraud from several whistleblowers, including current and former employees at the clinics, revealed the true nature and scope of the schemes, Gilead said.

Earlier this year, the company began implementing safeguards to protect against the fraud, including blocking certain prescribers from enrolling people through the MAP’s online portal and requiring additional validation such as providing photo identification for the individuals or requiring validation calls with the patients. Gilead said the networks responded to its efforts with workarounds – recruiting new prescribers that aren’t blocked, making fake ID cards for the recruits, coaching them on the validation calls or falsely posing as the patient on the call.

“As defendants’ increasingly brazen tactics demonstrate, Gilead cannot stop these dangerous and fraudulent schemes through its own efforts alone,” the company told the court in seeking an injunction.

“Well Care and its president, Mike Peacock, played a central role in the conspiracy by partnering with one of the main defendant groups to expand the fraudulent scheme to Jacksonville and enrich themselves at Gilead’s expensive,” a Gilead spokesperson told Fierce Pharma. “The Well Care defendants actively recruited and paid thousands of vulnerable Floridians to enroll in Gilead’s free-drug program for PrEP regardless of whether they wanted or needed PrEP medication, putting patient safety at risk.”

In addition to forking over $33 million, the settlement prohibits Well Care and its execs from participating in any Gilead access programs in the future.

Florida has been a breeding ground for HIV drug schemes as of late. Just last week, a Florida man was arrested for illegally distributing more than $230 million in adulterated medicines. Earlier this month, two other Florida men were sentenced after pleading guilty to conspiracy to commit mail and wire fraud in a $9 million scheme.

RELATED

Previously in the PrEP fraud case, Gilead and certain other defendants entered settlements in April. The terms of those deals weren’t disclosed. A Gilead spokesperson told Fierce Pharma that of the 58 defendants named in the original compliant, only 12 remain.

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