NJ: Pharmacy Admits Illegal Distribution of Prescription Opioids and Kickback Scheme

New Jersey Pharmacy Admits Illegal Distribution of Prescription Opioids and Kickback Scheme and Agrees to Criminal and Civil Penalties

A Bergen County pharmacy today admitted its role in a conspiracy to illegally distribute prescription opioids and to give kickbacks to healthcare providers, U.S. Attorney Philip R. Sellinger announced.

Dunn Meadow LLC (doing business as Dunn Meadow Pharmacy) of Fort Lee, New Jersey, pleaded guilty before U.S. District Judge Julien Neals to an information charging it with conspiring to illegally distribute prescription fentanyl and giving kickbacks to healthcare providers. Dunn Meadow also signed a civil settlement with the United States for violations of the False Claims Act and the Controlled Substances Act

According to documents filed in this case, statements made in court, and the terms of the civil settlement:

Dunn Meadow was a licensed retail pharmacy that sent controlled substances and other prescription medications to patients via mail throughout the United States, including highly addictive and dangerous transmucosal immediate release fentanyl (TIRF) medications. Dunn Meadow had contracts with and received payments from pharmaceutical companies that marketed and sold TIRF medications, including INSYS Pharma Inc. 

From 2015 through 2019, Dunn Meadow dispensed prescription TIRF medications and other controlled substances knowing that the prescriptions were not written for a legitimate medical purpose. Dunn Meadow knowingly filled prescriptions for controlled substances, including TIRF medications, for patients exhibiting suspicious and drug-seeking behavior, including patients that repeatedly requested early refills, paid thousands of dollars in cash for their prescriptions, or requested that prescriptions be sent to suspicious or inappropriate locations including hotels, casinos, and elementary schools.

Despite warnings from third parties, including some of its suppliers, Dunn Meadow continued to fill prescriptions for TIRF medications and other opioids written by doctors with suspicious and problematic prescribing habits, sometimes without receiving an original prescription. After two different pharmaceutical suppliers terminated supply agreements with Dunn Meadow, Dunn Meadow submitted applications to other suppliers stating that no supplier had ever suspended, ceased, or restricted controlled substance sales to Dunn Meadow. 

Dunn Meadow also admitted that it conspired to offer kickbacks to health care providers and pharmaceutical company sales representatives in violation of the federal Anti-Kickback Statute, in the form of lunches, dinners, and happy hours to induce them to send TIRF prescriptions to Dunn Meadow. Dunn Meadow admitted that its violations of the statute caused a loss to federally funded healthcare programs of over $4.5 million.

In addition, Dunn Meadow and its parent company, Allegheny Pharma LLC entered a civil settlement with the United States to resolve Dunn Meadow’s civil liability for violations of the False Claims Act and the Controlled Substances Act. Dunn Meadow’s criminal restitution payment will be applied to the civil resolution. Dunn Meadow has also agreed to pay up to $50 million dollars over the next five years to resolve its civil liability if it generates future revenue.

U.S. Attorney Sellinger credited diversion investigators of the U.S. Drug Enforcement Administration, New Jersey Division, under the direction of Special Agent in Charge Susan A. Gibson; special agents of the U.S. Department of Health and Human Services, Office of Inspector General, Office of Investigations-New Jersey Field Office, under the Direction of Special Agent in Charge Scott J. Lampert; special agents the U.S. Department of Defense, Defense Criminal Investigative Service, New Jersey Resident Agency, under the direction of Patrick J. Hegarty; and special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark.

The government is represented by Assistant U.S. Attorneys Jonathan Peck and Emma Spiro of the Criminal Division, Susan Pappy of the Civil Division, and Trial Attorney Douglas Rosenthal of the Department of Justice’s Civil Division.

Press Release

Tags: Opioid Crisis

National Association of Drug Diversion Investigators Federal Tax ID: 52-1660752 / DUNS Number: 073539913

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