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Press Release

Milwaukee Pharmacy Chain to Pay Over $2 Million to Resolve Allegations It Violated the False Claims Act

For Immediate Release
U.S. Attorney's Office, Eastern District of Wisconsin

United States Attorney Richard G. Frohling announced today that Hayat Pharmacy agreed to pay $2,050,000 to resolve allegations that it submitted false claims to Medicare and Medicaid for prescription medications.  

Hayat Pharmacy operates 23 pharmacy locations in the greater Milwaukee area.  The United States alleged that Hayat Pharmacy submitted false claims to Medicare and Medicaid in 2019 for two prescription medications, a topical cream consisting of iodoquinol, hydrocortisone, and aloe, and a multivitamin with the trade name Azesco.  During the relevant time period, Medicaid paid thousands of dollars per prescription for the iodoquinol-hydrocortisone-aloe cream, and Medicare paid hundreds of dollars per prescription for Azesco.  The United States alleged that Hayat Pharmacy switched Medicaid and Medicare patients from lower cost medications to the iodoquinol-hydrocortisone-aloe cream and Azesco without any medical need and/or without a valid prescription.  In addition to paying over $2 million to resolve the allegations concerning these false claims, Hayat Pharmacy agreed to conduct annual training concerning waste, fraud and abuse, and compliance with rules concerning medication switches.       

“Medicare and Medicaid only pay for prescription medications that are needed by patients, not prescriptions dispensed by pharmacies simply to increase their profits,” said United States Attorney Frohling.  “This settlement imposes a significant penalty on Hayat Pharmacy and will make the federal government whole for the pharmacy chain’s wrongdoing.”

“Our watchdog agency will hold accountable pharmacies who try to boost their profits by billing federal health care programs for medically unnecessary medications,” said Special Agent in Charge Mario M. Pinto, HHS-OIG, Chicago Region.    

James B. Hurley, Acting Special Agent in Charge, Federal Bureau of Investigation, Milwaukee Field Office, said: “The FBI prioritizes efforts to stop healthcare fraud and will continue to hold accountable pharmacies and other medical providers who misuse Medicare and Medicaid dollars.  By requiring Hayat Pharmacy to repay over $2 million, this settlement underscores that healthcare providers cannot put their interests ahead of their patients or the taxpayers.” 

The government’s investigation resulted from a whistleblower complaint filed under the qui tam provisions of the False Claims Act.  The whistleblower will receive a share of the settlement.  The lawsuit is captioned United States ex rel. Hussein v. Hayat Pharmacy, LLC, et al., 20-cv-472, and is pending in the District Court for the Eastern District of Wisconsin. 

 Assistant United States Attorney Michael Carter represented the government in this matter.  The HHS-OIG, FBI, and the Wisconsin Department of Justice assisted in the investigation.  The settlement agreement states allegations only; Hayat Pharmacy does not admit liability for the allegations. 

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Updated January 28, 2022