Select Page

If the phrase “the war on drugs” conjures up pictures of drug-sniffing
dogs and bundles of drugs hidden in vehicles crossing the border, think
again. The new front of the war is being waged here at home against giant
pharmaceutical companies and pharmacies. The weapon of choice is the False
Claims Act, and whistleblowers are the new soldiers.

In two recent cases, the government is taking aim at pharmacies it says
are turning a blind eye to fake prescriptions for pain pills and other

The U.S. Sees Epidemic Abuse of Controlled Substance Prescriptions

Prescription drugs are covered under Medicare Part D. Since Medicare began
covering controlled substances in 2006, Part D spending has more than
doubled. Medicare forked out $137 billion under Part D in 2015; Medicaid
added another $22 billion on top of that amount.

The Office of Inspector General has tagged the abuse and misuse of controlled
drugs as number 6 in the “top management and performance challenges
facing HHS.” OIG cites a comment from the Centers for Disease Control,
which explains that “the use of opiates (drugs commonly used for
pain relief) and other controlled substances has reached epidemic proportions,
with more than 2 million people abusing or dependent upon prescription
opioids.” Nearly one in ever 3 Part D beneficiaries was prescribed
a controlled opioid substance, costing Medicare a whopping $4.1 billion
in 2015 alone. The cost of these prescriptions has risen meteorically,
now standing at 165% more than what Medicare spent the years earlier, in 2006.

Pharmacies Are Accused of Circumventing DEA’s Controls On Prescription Narcotics

Controlled substances pose a double threat, to public health and also to
the public fisc. To try to regain control, DEA has imposed special rules
for “Schedule II” drugs, such as codeine, fentanyl, oxycodone,
cocaine, and methamphetamine. DEA singles out drugs for special Schedule
II treatment if they have a “high potential for abuse which may
lead to severe psychological or physical dependence.”

Pharmacies are being accused of trying to get around the rules so that
they can fill more prescriptions — and make more money doing it,
of course. The public and Medicare have the opposite incentive —
to keep prescriptions to a minimum, both to prevent prescription drug
abuse and the problems it causes, and also to avoid spending money on
unnecessary prescriptions.

In recent years, the Government has joined at least two False Claims Act
cases where pharmacies were accused of filling fake prescriptions for

CVS Pharmacy, Inc.

In a False Claim Act lawsuit unsealed in 2014, an insurance company-turned-whistleblower
accused CVS of submitting claims for dispensing controlled substances
without including the DEA number for the doctor who wrote the prescription.
In fact, the suit says that CVS submitted one of every 5 claims without
a proper licensing number, nearly tripling the omission rate of other
pharmacies. (On average, other chain pharmacies were submitting 7% of
claims without a DEA number.)


In 2015, the Justice Department settled similar claims against PharMerica
Corporation. PharMerica paid $31.5 million to the U.S. In the face of
allegations that it had dispensed Schedule II drugs without valid prescriptions.
PharMerica fills prescriptions for residents of nursing homes and skilled
nursing facilities. The government alleged that PharMerica’s pharmacies
were dispensing controlled substances without waiting to first get a written
prescription from a treating physician. The claims were initially brought
by pharmacist and former Pharmerica employee Jennifer Denk. Denk took
home $4.3 million in repayment for helping the Government recover its
money under the False Claims Act. Den filed her suit in the Eastern District
of Wisconsin.


Lee’s peers have named her a Georgia SuperLawyer every year for two decades.