In November 2020, Gilead Sciences filed a lawsuit against more than 50 Florida healthcare clinics, prescribers, laboratories, and pharmacies, over allegations that they exploited Gilead’s access program for HIV prevention drugs. Since filing the lawsuit, Gilead has reached several settlements and in June 2022, Gilead reached a $33 million settlement with Well Care – a healthcare clinic – and certain Well Care executives.
Background
When Gilead initially filed the lawsuit, it alleged that the defendants established a scheme to recruit homeless or low-income patients in Florida to seek fraudulent preexposure prophylaxis prescriptions through Gilead’s free-drug access program. The clinic would then allegedly perform a “wellness check” and prescribe the prescription regimen. The clinic would then seek reimbursement from Gilead for the drugs and the administration of the drug, certifying that the drugs were necessary and appropriate.
However, before giving the drugs to the patient, Gilead alleges that the clinic would repackage the drugs into generic bottles and offer to buy the drugs back from the patients for a small amount, so they could turn around and sell them on the black market or return them to their pharmacy partners. If the drugs were returned to the pharmacy partners, the pharmacy would then turn around and dispense the drugs to another patient (in the same “recruited” situation) for a second reimbursement for the same bottle of prescription drugs.
While the Medication Assistance Program reimbursed the companies at the wholesale acquisition price, several of the defendant clinics were able to purchase the drugs at the discounted 340B prices.
Gilead further alleged that the clinics would also pay the recruited patients to go to different clinics within the same network to get multiple prescriptions that are all submitted to Gilead for reimbursement.
Gilead alleged that the defendants “wrongfully obtained tens of millions of dollars in illicit profits by exploiting” the charitable program. Gilead stated that by engaging in these illegal schemes, the defendants “endangered the health and safety of thousands of individuals who are economically disadvantaged, and have placed Florida communities at an increased risk of exposure to HIV.”
When Gilead filed the lawsuit, it also filed a motion for Temporary Restraining Order and a Preliminary Injunction. Judge Kathleen M. Williams of the United States District Court for the Southern District of Florida granted the expedited motion for a Temporary Restraining Order and the Temporary Restraining Orders converted into Preliminary Injunctions. Williams also ordered the defendants to turn over any Truvada or Descovy prescriptions that they had that were no longer in the original, unopened container from Gilead, or that had been previously filled or dispensed.
The Well Care Settlement
In addition to the $33 million settlement, Well Care and its executives, including its president Mike Peacock, are prohibited in participating in any Gilead access programs in the future.
A Gilead spokesperson issued a statement, saying, “Well Care and its president, Mike Peacock, played a central role in the conspiracy by partnering with one of the main defendant groups to expand the fraudulent scheme to Jacksonville and enrich themselves at Gilead’s expense. The Well Care defendants actively recruited and paid thousands of vulnerable Floridians to enroll in Gilead’s free-drug program for PrEP regardless of whether they wanted or needed PrEP medication, putting patient safety at risk.”
What’s to Come
Gilead and other defendants opted to enter into settlements in April 2022, of which the terms have not been disclosed. Of the 58 initial defendants, only 12 remain.