Former Sales Representative Admits Role in Compounded Prescription Drug Scheme
NEWARK, N.J. – A former sales representative today admitted his role in a scheme to defraud a New Jersey state health benefits program, U.S. Attorney Craig Carpenito announced.
Thomas Bowers, 46, of Little Falls, New Jersey, pleaded guilty by videoconference before U.S. District Judge William J. Martini to an information charging him with conspiracy to commit health care fraud.
According to documents filed in this case and statements made in court:
Compounding is a practice in which a pharmacist or physician combines, mixes, or alters ingredients of a drug to create a medication tailored to the needs of an individual patient. The Food and Drug Administration does not approve compounded drugs and thus does not verify the safety, potency, effectiveness, or manufacturing quality of compounded drugs. Generally, a physician may prescribe compounded drugs when an FDA-approved drug does not meet the health needs of a particular patient.
Between December 2014 and March 2016, Bowers worked as a sales representative for a marketing company that marketed and sold compounded drugs to physicians, including pain, scar and wound creams and certain supplements and vitamins. Certain compounding pharmacies paid the marketing company based on a percentage of the reimbursement payments they received from health care benefit programs for each prescription that Bowers referred to the pharmacies. The marketing company, in turn, paid Bowers based on the compounded prescriptions he generated. Bowers recruited patients, including family members, who had prescription drug coverage under the New Jersey School Employee’s Health Benefits Program, to obtain medically unnecessary prescriptions for compounded drugs. Bowers paid patients that he recruited to obtain prescriptions from doctors even though the doctors did not have any interaction with the patients for purposes of determining that a prescription was medically necessary. He obtained medically unnecessary prescriptions from doctors who only conducted a cursory patient examination that was insufficient to legitimately deem that a compounded drug was medically necessary for the patient.
The count of conspiracy to commit health care fraud carries a maximum penalty of 10 years in prison and a $250,000 fine, or twice the gain or loss from the offense, whichever is greater. As part of his plea agreement, Bowers must forfeit $157,747 in criminal proceeds and pay restitution of at least $593,678. Sentencing is scheduled for April 8, 2021.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, and Defense Criminal Investigative Service, under the direction of Special Agent in Charge Patrick J. Hegarty, with the investigation leading to today’s plea.
The government is represented by Assistant U.S. Attorney Adam Baker of the United States Attorney’s Office, Opioid Abuse Prevention and Enforcement Unit in Newark.