Department of Justice Files Nationwide Lawsuit Against AmerisourceBergen Corp. and Subsidiaries for Controlled Substances Act Violations
PHILADELPHIA – United States Attorney Jennifer Arbittier Williams announced that the United States filed a civil lawsuit against Philadelphia-based pharmacy Spivack, Inc., which previously operated under the name Verree Pharmacy, and its former owner, pharmacist Mitchell Spivack, alleging that they engaged in a years-long practice of illegally dispensing opioids and other controlled substances, and systematic health care fraud. The lawsuit alleges that Verree and Spivack illegally dispensed unparalleled quantities of opioids and other controlled substances into the Philadelphia community. The complaint seeks civil penalties and civil damages, which could total in the millions of dollars, as well as injunctive relief.
The culmination of a multi-year federal-state investigation, the complaint alleges that Verree Pharmacy, its pharmacist and then-owner Mitchell Spivack and other employees of Verree, had a responsibility to dispense opioids and other controlled substances only when appropriate. Instead, the United States alleges that the pharmacy and Spivack dispensed the drugs, even when faced with numerous red flags suggestive of diversion—such as opioids in extreme doses, dangerous combinations of opioids and other “cocktail” drugs preferred by those struggling with addiction, excessive cash payments for the drugs, blatantly forged prescriptions, and other signs that the pills were being diverted for illegal purposes. The complaint alleges that Verree—which was the top retail pharmacy purchasing oxycodone in Pennsylvania—has been a nationwide and regional outlier in its deviant purchasing, dispensing, and billing of controlled substances. To avoid scrutiny from the drug distributors that sold them the pills, Verree through Spivack, allegedly made false statements to maintain the façade of legitimacy and keep the pharmacy stocked with these pills critical to its profits. Behind that façade, the complaint alleges that Spivack drew millions of dollars from the pharmacy while the public suffered the consequences, including one patient who overdosed and died next to Verree Pharmacy bottles dispensed by Spivack.
The United States’ complaint alleges that Verree and Spivack were also engaging in an expansive health care fraud scheme involving fraudulent billings for drugs not actually dispensed. The alleged cornerstone of the scheme was a code used by the pharmacy employees in their internal computer system: “BBDF” or “Bill But Don’t Fill.” Verree, Spivack and their co-conspirators allegedly used BBDF as a means to cover their losses on other drugs and further line their pockets with illicit profits by falsely claiming to insurers, including Medicare, that they had dispensed a drug to a patient, when in fact they had not. According to the complaint, this sophisticated fraud—which one of the employees admitted to investigators—resulted in significant losses to Medicare and other federal programs.
The lawsuit seeks to impose civil penalties and damages on Verree and Spivack under the Controlled Substances and False Claims Acts. If Verree and Spivack are found liable, they could face civil penalties up to $68,426 for each unlawful prescription dispensed, civil penalties up to $23,607 for each false claim they submitted to federal health care programs, and treble damages for the alleged health care fraud against federal programs. The court may also award injunctive relief to prevent Verree and Spivack from committing additional controlled substance violations.
“Pharmacies and pharmacists engage in the deepest violation of the community’s trust when they exploit their access to opioids and other controlled substances and illegally dispense the drugs for their own financial gain,” said U.S. Attorney Williams. “It is even more disturbing when pharmacies take advantage of their position of trust by fraudulently billing Medicare and other federal health care programs for bogus prescription drugs. My Office will use every resource it has to pursue and hold these individuals accountable. I am grateful for the support and investigative teamwork that the DEA, HHS-OIG, and the Pennsylvania Attorney General’s Office provided in this important matter.”
“In a city that has been so adversely and disproportionately affected by the opioid epidemic, Verree Pharmacy was the top retail pharmacy purchasing oxycodone in the entire state of Pennsylvania,” said Thomas Hodnett, Special Agent in Charge of the Drug Enforcement Administration’s (DEA) Philadelphia Field Division. “Spivack and the other employees at Verree routinely demonstrated total disregard for their professional and ethical obligations and improperly dispensed powerful painkillers when numerous warning signs were present.”
“The Medicare and Medicaid Programs provide vital prescription drug services to their beneficiaries, said Maureen R. Dixon, Special Agent in Charge of the Philadelphia Regional Office for the Department of Health and Human Services, Office of Inspector General. “Pharmacies are required to only bill for prescriptions and products they actually provide to their patients. HHS-OIG will continue to work with the U.S. Attorney’s Office, the Pennsylvania Attorney General’s Office, and the DEA to investigate allegations of fraudulent insurance billings.”
“We know that nearly 80% of those who use heroin first started with misusing a prescription opioid,” said Attorney General Josh Shapiro. “Pharmacies and medical professionals have a responsibility under the law to dispense these drugs only when appropriate. These allegations of illegal dispensing and fraud are disturbing -- they hurt families and communities all over the Commonwealth and steal needed resources from taxpayers. Our office is committed to continuing to work with our federal partners, and I am thankful for the women and men who collaborated on this case.”
If the public has any information regarding Verree Pharmacy or any other health care fraud allegation, individuals should contact the HHS-OIG hotline at 800-HHS-TIPS.
The case is being investigated by the Philadelphia Field Division of the Drug Enforcement Administration, HHS-OIG, and the Pennsylvania Office of the Attorney General, with additional assistance from the Office of Personnel Management Office of Inspector General, the Defense Health Agency, and the Defense Criminal Investigative Service. The civil investigation and litigation are being handled by Assistant United States Attorney Anthony D. Scicchitano and auditors Dawn Wiggins and George Niedzwicki.
The complaint contains allegations only that the United States must prove if the case proceeds to trial.
UNITED STATES ATTORNEY’S OFFICE
EASTERN DISTRICT OF PENNSYLVANIA
615 Chestnut Street, Suite 1250
Philadelphia, PA 19106
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