Former Sales Representative Admits Role in $7.89 Million Compounded Prescription Drug Scheme
NEWARK, N.J. – A former sales representative for several compounding pharmacies and marketing companies today admitted his role in a scheme to defraud public and private health benefits programs of $7.89 million for the billing of medically unnecessary compounded prescriptions, Acting U.S. Attorney Rachael A. Honig announced.
Christopher Cuffari, 55, of Little Falls, New Jersey, pleaded guilty by videoconference before U.S. District Judge John Michael Vazquez to an information charging him with conspiracy to commit health care fraud.
According to documents filed in this case and statements made in court:
Compounded medications are specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient. Although compounded drugs are not approved by the Food and Drug Administration (FDA), they are properly prescribed when a physician determines that an FDA-approved medication does not meet the health needs of a particular patient, such as if a patient is allergic to a dye or other ingredients in the prescription.
Between November 2014 and September 2017, Cuffari participated in a conspiracy that involved the submission of fraudulent prescriptions for compounded medications to public and private insurance plans. The scheme centered on the discovery that certain insurance plans paid for prescription compounded medications – including scar creams, wound creams, and metabolic supplements/vitamins – at exorbitant reimbursement rates.
Cuffari exploited this opportunity through working as a sales representative for several compounding pharmacies. To profit as a sales representative, Cuffari targeted individuals who had insurance plans that covered compounded medications and then convinced those individuals to obtain prescriptions for compounded medications, regardless of medical necessity, often by providing them with cash payments. To obtain prescriptions for compounded medications for some of the recruited individuals, Cuffari caused payments to be made to a New Jersey-based physician.
Once the prescriptions were written, they were filled by the compounding pharmacies with which Cuffari worked. The compounding pharmacies would then receive reimbursement from the insurance plans and would pay Cuffari a percentage of the reimbursement amount.
As part of his plea agreement, Cuffari must forfeit $995,328 in criminal proceeds he received for his role in the scheme and pay restitution of at least $7.89 million. He faces a statutory maximum of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Nov. 9, 2021.
Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Sean M. Sherman of the U.S. Attorney’s Office, Opioid Abuse Prevention and Enforcement Unit, in Newark.