In further fallout from last year’s Department of Justice settlement with kaléo, the manufacturer of Evzio, an expensive naloxone drug, a Florida specialty pharmacy, Solera, has entered into a deferred prosecution agreement and agreed to pay $1,310,000 to resolve allegations that it obtained fraudulent prior authorizations from Medicare Part D Plans and paid kickbacks to patients by waiving Medicare co-pays.
According to the deferred prosecution agreement (DPA), which was filed in the District of Massachusetts federal court on July 8, 2022, “Evzio’s list price was $4,100 for a pack of two auto-injectors, the competing Narcan nasal spray was available for roughly $150 per two-pack, and generic injectable naloxone was available for less than $12 per dose.” Because of Evzio’s high price, pharmacies could make substantial profits – “about $400 per Evzio pack” – if they dispensed Evzio rather than one of the much cheaper alternatives. Meanwhile, Solera knew that Medicare Part D plans would not cover Evzio unless a physician presented a prior authorization request justifying the need for Evzio rather than another naloxone drug.
To obtain prior authorizations, and the profits from dispensing Evzio, Solera resorted to blatant fraud. According to the DPA, Solera employed several “Patient Navigators” who signed prior authorization forms in place of physicians and included false clinical information about the patients and their supposed need for Evzio in lieu of Narcan or generic naloxone.
Solera also waived Medicare co-pays so that patients would accept Evzio rather than one of the cheaper alternatives. The Department of Health and Human Services Office of Inspector General has warned that “anyone who routinely waives copayments or deductibles can be criminally prosecuted under” the anti-kickback statute. While a pharmacy or other provider sometimes may waive a Medicare co-pay based on a patient’s demonstrated financial need, the DPA states that “Solera waived Medicare beneficiary co-payment obligations for Evzio on numerous occasions without analyzing whether the beneficiary had a genuine financial hardship.”
The Solera DPA requires the pharmacy to adhere to a set of standard operating procedures that contain further revelations about the government’s concerns with the practices of specialty pharmacies like Solera. CoverMyMeds is a McKesson-owned system that allows prescribers to obtain prior authorizations electronically. According to the DPA, Solera must refrain from, among other things “[c]reating additional or ‘dummy’ CoverMyMeds accounts for purposes of submitting prior authorizations; and/or . . . [u]tilizing the login credentials for prescribers’ CoverMyMeds accounts or otherwise submitting prior authorizations using prescribers’ CoverMyMeds accounts.” In other words, Solera can’t pretend to be a prescribing physician on CoverMyMeds.
Solera is the first pharmacy to enter into a criminal resolution involving fraudulent prior authorizations for Evzio. Two other pharmacies, People’s Drug Store and Ray’s Drugs, previously entered into civil settlements involving Evzio. The DOJ settlement with kaléo alleged that another pharmacy, Benzer (now known as Ravkoo), also submitted false prior authorization requests to Medicare. It remains to be seen how or if DOJ will resolve its potential claims against Benzer.
Regardless, the DPA and civil settlement with Solera highlight the peril specialty pharmacies face when they waive co-pays and use fraudulent prior authorization requests to get Medicare to pay for expensive drugs. The resolution with Solera also points to the possibility of future cases from whistleblowers who have information about unsavory practices at specialty pharmacies.