Authorities Charge 48 With Reselling Rx Drugs in Medicaid Fraud Case

Four dozen U.S. residents have been charged with reselling to pharmacies $108 million worth of HIV medications and other prescription drugs they obtained from Medicaid beneficiaries, federal officials announced Tuesday, Reuters reports (Katz, Reuters, 7/17).

According to the Wall Street Journal, the charges are the latest in an ongoing effort by the federal government to reduce fraud within federal health care programs, which costs the U.S. billions of dollars annually (Bray, Wall Street Journal, 7/17).

Federal prosecutors and the FBI said the individuals obtained the drugs from Medicaid beneficiaries, who would purchase the drugs at little or no cost and sell them for cash. The drugs then would be repackaged and sold to pharmacies through a network of underground distribution companies, according to authorities (Reuters, 7/17).

Preet Bharara, the U.S. Attorney in Manhattan, said the scheme illegally diverted $108 million in drugs between March 2011 and July 2012. The drugs include treatments for asthma, HIV and schizophrenia, which can retail for more than $1,000 a bottle, according to the Journal.

The charges include:

• Conspiracy to commit mail fraud, wire fraud and health care fraud;
• Conspiracy to misbrand and illegally dispense prescription drugs;
• Conspiracy to traffic in counterfeit goods; and
• Engaging in a narcotics conspiracy (Wall Street Journal, 7/17).

Bharara said no pharmacies or Medicaid beneficiaries have been charged (Reuters, 7/17).