Sales Rep for North Alabama Compounding Pharmacy Charged in $13 M Insurance Conspiracy
BIRMINGHAM – Federal prosecutors today charged a sales representative for a Haleyville, Ala.,-based compounding pharmacy with conspiracy in a multi-faceted scheme to generate prescriptions and defraud Blue Cross Blue Shield of Alabama and one of its prescription drug administrators out of over $13 million in one year. Acting U.S. Attorney Robert O. Posey, Federal Bureau of Investigation Special Agent in Charge Roger Stanton, United States Postal Inspector in Charge, Houston Division Adrian Gonzalez, U.S. Department of Health and Human Services, Office of Inspector General, Special Agent in Charge Derrick L. Jackson, and Defense Criminal Investigative Service Special Agent in Charge John F. Khin announced the charges.
The U.S. Attorney’s Office filed a four-count information in U.S. District Court charging ROBIN GARY LOWRY, 49, of Columbus, Miss., with conspiring between October 2014 and November 2015 to defraud BCBS of Alabama and Prime Therapeutics, the entity that processed prescription drug reimbursement claims for BCBSAL. The information also charges Lowry with three counts of health care fraud for submitting fraudulent claims for payment to BCBSAL.
In conjunction with the charges, prosecutors also filed a plea agreement with Lowry.
Lowry worked for Northside Pharmacy, which did business as Global Compounding Pharmacy. Global’s compounding and shipping facility was in Haleyville. The pharmacy did all of its prescription processing, billing and customer service at its “call center” in Clearwater, Fla.
In May 2015, Prime notified Global that it was terminating the compounding pharmacy from its network, effective Sept. 4, 2015. Also in May 2015, two Global employees became listed owners of Carrollton Pharmacy, which does business as The Prescription Shop in Haleyville. After the Sept. 4 date, Global began compounding and shipping its drugs from other pharmacies, including TPS, which in 2015 was a Prime network pharmacy contracted with BCBSAL.
Prime paid claims of more than $13 million to Global and TPS in 2015, according to Lowry’s plea agreement. Global and TPS billed more than $13 million. Lowry’s plea agreement holds her accountable for between $250,000 and $550,000 of the fraudulent claims and seeks to have her forfeit $272,405 as proceeds of illegal activity.
According to the information and plea agreement, there was a conspiracy among Lowry and others at Global to generate prescriptions, particularly high-reimbursement prescriptions. To increase profits, Global targeted products covered by BCBSAL, which was its employee insurance provider.
Global paid Lowry an annual salary, plus a monthly commission for each prescription she obtained.
The court documents describe the conspiracy as follows:
Global recruited close relatives of doctors and other prescribers as sales representatives. It also encouraged employees to work, typically without pay, at prescribers’ offices where they were to review patient files in order to recommend and encourage use of Global's products.
Global also frequently instructed its employees to obtain high-reimbursing, but medically unnecessary prescriptions for Global products for themselves and their family members, and waived co-pays for these products. A July 2015 email from a Global sales executive to other pharmacy employees encouraged every sales representative and district manager to get a prescription “for themselves and every eligible family member” for SilaPak, a high-reimbursing “topical skin repair complex.”
“So far we have 15 reps and one [district manager] who have gotten at least one in. If we get everyone in the week that would be around 45-50 depending on the family. At 50 that is $220,000 in revenue and we need it,” the email said.
Lowry obtained prescriptions from a prescriber with whom she had a close familial relationship, and who sometimes issued the prescriptions to people without talking to or having a doctor-patient relationship with them. Lowry also frequently forged prescriptions from her relative, according to the charges and her plea agreement.
In July 2015, Lowry sent Global a forged SilaPak prescription for the three-year-old child of a Global employee, even though Global’s own marketing materials warned that the SilaPak cream was not to be used for children. Global filled the prescription and mailed a refill of it for the child to Santa Rosa Beach, Fla., in August 2015.
The maximum punishment for the conspiracy charge is five years in prison and a $250,000 fine. The maximum penalty for health care fraud is 10 years in prison and a $250,000 fine.
FBI, USPIS, HHS-OIG and DCIS investigated the case, which Assistant U.S. Attorneys Chinelo Dike-Minor and Nicole Grosnoff are prosecuting.