On December 8, 2021, Riad Zahr, a Michigan pharmacist, along with two specialty owned pharmacies formerly owned and operated by Zahr, reached a $1 million settlement with the United States Department of Justice over allegations that they submitted false claims for the drug Evzio. Evzio was an injectable naloxone hydrochloride used to reverse opioid overdoses and was the highest-priced version of naloxone on the market. Insurers often required prior authorization requests before they would approve coverage for Evzio.
The United States alleges that between August 1, 2017 and June 30, 2019, Plymouth Towne Care Pharmacy d/b/a People’s Drug Store and Shaska Pharmacy LLC d/b/a Ray’s Drugs submitted false claims for Evzio to Medicare. The two pharmacies allegedly submitted false and misleading prior authorization requests for Evzio that included clinical assertions for which the pharmacies lacked factual basis.
The government further alleged that there were times where Zahr and the pharmacies initiated Evzio prescriptions based on information received from kaléo Inc. (the manufacturer of Evzio), such as bare-bones patient lists with only basic biographical details. Zahr and the pharmacies also allegedly included assertions in the prior authorization requests for Evzio that were purportedly written by prescribing physicians, regarding the comparative effectiveness of Evzio, but were really written by the pharmacies or Zahr. The prescribing physicians did not review, sign, or submit any of the prior authorizations at issue.
The government further alleges that Zahr and the pharmacies coordinated with kaléo sales representatives and prescribing doctors to obtain prescribers’ credentials for CoverMyMeds, an online portal through which providers may complete prior authorization request forms and submit those forms to insurers for coverage determinations. Zahr and the pharmacies would then log into CoverMyMeds using the provider accounts and complete the prior authorization request forms and submit them to insurers. If a prior authorization request form called for a prescribing physician signatures, Zahr would either sign it or use a saved electronic version of the prescribing physician’s signature.
The settlement also resolves allegations that Zahr and the pharmacies dispensed Evzio prescriptions to Medicare beneficiaries without collecting – or attempting to collect – co-payments for the drug, in violation of the Anti-Kickback Statute. The waived co-payments varied in amounts from less than $10 to more than $3,000.
As is often the case, claims resolved by this settlement are only allegations and there has been no determination of liability.
The allegations were initially brought by a former employee of kaléo Inc., the manufacturer of Evzio. The DOJ and kaléo previously came to a resolution over its own involvement in causing false claims to be submitted for Evzio in November 2021.