A recent criminal trial involving a retail pharmacist in New York City may signal a possible area of law enforcement priority with regard to health care fraud and abuse. O&A attorneys Richard Harrow (lead counsel) and David Nardolillo represented the defendant in People v. Alcindor, a retail pharmacist charged with multiple counts of Grand Larceny and Criminal Diversion of Prescription Medications and Prescriptions by the Manhattan District Attorney. The charges were the result of a multi-agency investigation by NYPD Manhattan-North Narcotics, the Office of the Medicaid Inspector General, and the New York City Human Resources Administration. This investigation also involved undercover operations at the pharmacy where the defendant worked.
At issue in the trial was the reimbursement, by Medicaid, of high-priced medications used to treat HIV and AIDS. At trial, testimony established the expensive nature of these drugs; a patient who is prescribed a course of medication to treat HIV/AIDS can have prescription bills that exceed $25,000 per year. Investigators also testified that these medications had a high “street value” which could allow patients to convert prescriptions for these medications into cash.
In the top larceny count, the prosecution alleged that the pharmacist had billed Medicaid for $2 million worth of these medications that were not dispensed. The theory on this charge was based solely on comparing the amount of a medication billed to Medicaid with the amount of the same medication ordered from wholesalers through the primary market. Testimony by prescription drug wholesalers on cross-examination touched upon the existence of a grey market for prescription medications as well as alternative source and secondary markets for these drugs. The defendant was ultimately acquitted of this top larceny count and the criminal diversion charges, but was convicted on 4 counts of attempted larceny springing from the undercover operations at the pharmacy.
Given the high street value of these medications, as well as concerns of potential tampered drugs or counterfeit medications received through the grey market or from alternative sources, law enforcement agencies could prioritize the prescription medication markets as an area of inquiry and employ the full panoply of investigative tools at their disposal, including subpoenas, search warrants, wiretaps, and undercover operations.
(Past results are reported to provide the reader with examples of the type of litigation in which we practice and does not and should not be construed to create an expectation of result in any other case as all cases are dependent upon their own unique fact situation and applicable law.)