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Court Sentences Pharmacy Owner And Others On Charges That They Paid Kickbacks To Pharmaceutical Sales Rep In Exchange For Prescription Referrals

On April 16, 2021, the Department of Justice announced that a court sentenced six individuals, including a Virginia pharmacy owner and a former sales representative for Kaléo Pharmaceuticals, after they pled guilty to a variety of criminal charges. Mohamed Abdallah, the owner of Medex Health Pharmacy and Royal Care Pharmacy, was sentenced to four years in prison on charges that, among other things, he participated in a scheme to pay kickbacks for the referral of prescriptions for compound medications and for Evzio, a naloxone auto-injector device that Kaléo sold for more than $4000 per package. Meanwhile, the court sentenced Dan Walker, the former Kaléo sales representative, to 15 months in prison for his role in accepting the kickbacks and referring Evzio prescriptions to the pharmacies.

The case is unusual because it involves a sales representative from a large pharmaceutical company. Kaléo was in the news in late 2018 when 60 Minutes ran a story about Evzio’s cost, which was approximately 30 times higher than that of Narcan, another naloxone anti-overdose drug. As the Royal Care case shows, convincing doctors to prescribe, and insurers to pay for, such expensive drugs often may involve kickbacks and other fraudulent conduct.