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A Conspiracy To Commit Healthcare Fraud: Compounding Pharmacy

Pharmacies are critical to public health, safety, and comfort. As crucial as these businesses are, they also face criticism about how they do business. People working in the compound pharmaceutical industry can be prepared to defend themselves by hiring a senior civil and criminal defense lawyer against the accusation of compound pharmacy fraud.

What is Compounding?

Compounding is a method through which a pharmacist or chemist mixes or changes a drug's ingredients to create a medicine specific to the patient's needs. Compound drugs are not available from pharmaceutical firms on a commercial basis. Alternatively, they are made for the pharmacy user.

There are several reasons for requiring a compound prescription. For instance, a patient may need a particular strength, or a patient may need liquid medication in place of a pill. Nearly all medicines were combined at one time. This decreased considerably with the rise of industrial drug manufacturing in the 1960s.

Compounding is typically costly because time and specialized training and medication creation equipment are needed. The high reimbursement rates for compound prescriptions sadly contributed to substantial fraudulent activity.

What is a Compound Pharmacy?

A compound pharmacy differs in several crucial ways from a regular pharmacy. To begin with, it specializes in the creation of medicines that meet the individual patient's health needs. Each drug it produces is tailored to a single customer and his or her particular medical condition.

Compound pharmacies constitute a relatively small percentage of pharmacies in the United States today. Of the more than 56,000 established pharmacies, only 7,500 can produce pharmaceutical compounds. The medicines are not only provided by pharmacists, but also by licensed physicians or other trained people, who are managed by a qualified compound pharmacist.

Finally, the FDA will not sanction compound pharmaceutical products produced by such firms. The FDA can not guarantee its safety, quality, or efficiency.

What is Compound Pharmacy Fraud?

Claims of common compounding pharmacy fraud constitute a serious charge and may even form a federal crime. There are instances and charges where the doctors and pharmaceutical company teams up for profits and it’s considered a conspiracy to commit healthcare fraud. The punishments and fines can be excessive and can also lead to incarceration. Sadly, the nature of compounding pharmacies has led to numerous costly instances of system abuse.

This has resulted in a significant rise in compounding pharmacies investigations and other small compounding pharmacies. Federal investigators are now more aggressively pursuing evidence of health fraud than before.

The United States Attorney's Office 's federal search warrants for compound pharmacies have risen in recent years. False record and kickback allegations include numerous reasons why investigations and subsequent charges on health care fraud claims are filed.

Compound pharmacies can charge for each ingredient in which the compound is formulated. The Government often claims that it does not need all the ingredients or that the patient does not benefit from the drug.

More than 55,000 compounding pharmacies are currently available in the United States. Almost 8,000 of these offer advanced compounding services. For federal researchers, this astounding number of compounding pharmacies presents a daunting challenge.

It is also important to note that compounding pharmacies are not well regulated. No safety guarantees or advantages of any drug compounded in these pharmacies are available.

Compounding Pharmaceutical Fraud Investigation

The role of these organizations is to concentrate on resources and personnel to investigate compound pharmaceutical fraud.

The investigation may start with the compound pharmacy being served with a subpoena, depending on the type of fraud being investigated. The subpoena usually would require the company to provide documents for financial reports, marketing deals, physician relationships, and other business information.

The summons may not necessarily clear whether the inquiry is criminal or civil. As such, it is advisable to preserve legal counsel to read the subpoena and advise compound pharmacists how to behave accordingly.

Officers may provide a search warrant for access to the premises. Owners and employees should have a lawyer reading the order and being present if any of the employees or owners are questioned.

Agents can talk to everyone involved in a compound pharmaceutical fraud investigation.

Whoever owns, works for, or is otherwise associated with the compound pharmacy could be charged with civil or criminal fraud based on the investigation findings.

Compound pharmaceutical fraud penalties will vary depending on the condition in which it is committed. It would also depend on whether or not the proceedings are being carried out at the state or federal level.

Compounding Pharmaceutical Fraud Penalties

Penalties for the conviction of conspiracy to commit healthcare fraud can range from civil fines to state or federal prison sentences. It is not unusual for judges to punish, such as the defrauded victims, to pay the victims' costs and attorneys ' fees if the fraud results in injuries or deaths of customers, pharmacy staff, dealers, and owners may be sentenced from 10 years to life in jail.

Author Credits For Contributor James S. Bell P.C

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With over fifteen years of experience, James S. Bell P.C. has forged a name as a leading United States trial attorney. Most notably, Bell obtained the largest verdict in the United States in 2017 and the ninth (9th) largest verdict in United States history against JPMorgan Chase Bank for in excess of $6,000,000,000 (6 Billion Dollars).

Bell has become a recognized legal thought leader through projects such as co-authoring an article titled "Piercing the Corporate Veil" regarding property division in divorce and features in publications such as Forbes, Inc., and Entrepreneur and has been granted recognitions such as Best Personal Injury Attorney and Litigator of the Week.

Bell is in admission with the Bar in the States of Texas, California, and New York, and obtained his undergraduate and law degrees from Southern Methodist University. He continues to serve in a wide breadth of cases, including but not limited to healthcare disputes; Qui Tam litigation; white-collar criminal defense; catastrophic injury; ERISA; business fraud; bankruptcy; professional negligence/malpractice; oil & gas; complex securities disputes; divorce; child custody; and real estate fraud cases.


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