Pair will pay $4M to settle charges

Businessmen accused of drug kickback scheme

Two South Florida businessmen have agreed to pay $4 million to settle federal charges that they engaged in schemes to overcharge public health insurers for drugs that patients didn’t order or want.

The kickback scheme enriched a long list of defendants who colluded to obtain and fill prescriptions for expensive compounded drugs and then submitted reimbursement claims to Medicare and armed-services insurer TRICARE that generated millions of dollars, according to a 2015 federal lawsuit.

Thirty-six other Florida companies named as defendants in the case, including pharmacies, health providers and marketers, previously settled charges filed under the federal False Claims Act by the United States Attorney’s Office for the Middle District of Florida.

The remaining defendants, Jack Lee Stapleton, 75, of Gulf Stream, and Jack Hunter Stapleton, 33, of Fort Lauderdale, were accused of using telemarketers to persuade patients to accept expensive compounded drugs, then paying telemedicine providers to prescribe those drugs without ever seeing the patients or conducting any meaningful medical examinations.

The Stapletons, who operated numerous companies with various names in South Florida, sent the prescriptions to compounding pharmacies that agreed to pay the men half of whatever they were reimbursed, the lawsuit claimed. They focused on compounded drugs — custom-made combinations of two or more drugs — that were not mass-produced and could be invoiced for thousands of dollars per prescription.

“Kickback arrangements undermine confidence in our health care system,” said Brian M. Boynton, acting assistant attorney general of the Department of Justice’s civil division, in a news release announcing the settlement. “This case demonstrates how kickback schemes often result in the provision of medically unnecessary services at the taxpayer’s expense.”

The release stated that the Stapletons’ decision to pay $4 million resolved claims that were only allegations, adding, “There has been no determination of liability.”

According to the suit, telemar

keters would call patients with diabetes, cardiovascular conditions and other diseases to get their consent to obtain prescriptions from associated doctors.

The products usually involved creams related to treatments for pain, wounds, scars and similar conditions.

The marketers persuaded physicians to prescribe compounds with high doses of the corticosteroid Fluticasone and the anti-inflammatory drug Flurbiprofen, the complaint states, because they could bill Medicare and TRICARE thousands of dollars more than for compounds made with Ketoprofen, which is as effective as Flurbiprofen but costs 72% less.

One of the pharmacies received $13,497,447 for compounds containing Flurbiprofen, the suit said.

If one of the participating pharmacies was unable to produce a compounded drug, it would transfer the prescription to another pharmacy and both would split the proceeds, the suit states.

The scheme ran into complications when patients began complaining to their insurers about being contacted by marketers who worked for one of the Stapletons’ companies, C.V. McDowell, and being urged to take prescriptions that they didn’t want, need or request.

One patient complained that “C.V. McDowell wouldn’t stop calling her about a refill she did not want (she never wanted or requested the first one) for a wound she does not have.”

Patients became suspicious, the suit stated, because they were also told they didn’t have to remit a co-pay.

According to the lawsuit, the companies involved in the scheme absorbed the patients’ co-payments to induce them into accepting the prescriptions.

Waiving or reducing co-payments violates laws prohibiting kickbacks.

The scheme was exposed by Dwayne Thornton, co-plaintiff of the government’s lawsuit and former vice president of operations for one of the companies,

Bradenton-based Soothe Pharmacy, charged in the suit.

Thornton filed his complaint after noticing the illegal practices, fearing he would be criminally charged, and failing to persuade his bosses and principals of other companies involved in the scheme to stop illegal practices.

Because the U.S. Attorney’s Office took over the case, Thornton will receive an undetermined portion of the $4 million settlement, the Department of Justice said in its news release.