Pharmacy group sues Cardinal over government contracts

A group of pharmacies that specialize in radiopharmaceutical products has sued Cardinal Health, accusing the Dublin drug distribution company of hiding behind front companies to land government contracts mostly tied to the Veterans Administration.

UPPI, a cooperative based in Georgia, filed what’s called a False Claims Act against Cardinal in federal court in Washington state.

The group claims the amount of money involved tops $10 million.

Cardinal Health has denied doing anything improper.

Radiopharmaceutical products are used to diagnose and treat medical conditions. The government buys the products through a competitive contracting process that gives preferential treatment to small businesses, according to the lawsuit.

In this case, Cardinal is charged with getting contracts meant for small businesses owned by service-disabled veterans who can obtain the contacts without competitive bidding.

Cardinal is accused of hiding behind front companies that could not perform the work required for the contracts. Once the front companies got the contracts, Cardinal did most of the work and received most of the money while giving a portion of the money to the front companies, according to the lawsuit.

The result is that Cardinal made millions of dollars from contracts set aside for small businesses, the lawsuit claims.

The action was filed under a law that allows private groups to sue on behalf of the federal government to recover money paid under government contracts.

Cardinal Health said in a statement that it was pleased that the Department of Justice chose not to participate in the case.

“We have been transparent throughout the contracts in question, and operate in strict accordance with all applicable state and federal regulations in its preparation and distribution of radiopharmaceuticals,” the company said.

John Witkowski, UPPI’S president, said, “The case has merit.”

UPPI is a membership organization that promotes the business interests of its nearly 70 nuclear pharmacies across the country. mawilliams@dispatch.com @Bizmarkwilliams