New York – A nationwide prescription drug ring bought mountains of HIV medications and other drugs from down-and-out Medicaid recipients in New York City, then marketed the pills to pharmacies that dispensed them to unsuspecting consumers, authorities said Tuesday.
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Federal prosecutors in Manhattan detailed the scheme at a news conference announcing charges against 48 defendants.
Arrests were made in New York, Pennsylvania, Massachusetts, Florida and Texas. The FBI also seized more than 250,000 pills worth $16 million.
The defendants “ran a black market in prescription pills involving a double-dip fraud of gigantic proportions,” said U.S. Attorney Preet Bharara.
Unlike cases involving prescription painkillers and other addictive narcotics, the ring specialized in expensive medications – some worth more than $1,000 a bottle – for serious illnesses like HIV, schizophrenia and asthma. Authorities estimated that Medicaid lost at least $500 million in reimbursements over at least five years on pills diverted into the secondhand market.
“The scheme was a theft, pure and simple, from a program funded by taxpayers,” said Janice K. Fedarcyk, head of the FBI’s New York office.
Though the fraud created a risk that patients could end up using secondhand drugs that were outdated or degraded from storage in car trunks or storage lockers, authorities said there were no reports that anyone was harmed.
According to a criminal complaint, the fraud emanated from street corners in poor neighborhoods in Manhattan and the Bronx, where some of the defendants would buy pills from a high concentration of Medicaid beneficiaries who originally got them at little or no cost. In some instances, the buyers would pay $50 for a bottle of pills worth several hundred dollars.
The sellers “were vulnerable enough that they’d like to make a little money rather than take their medicine,” Bharara said.
The ring doctored the drugs to make them look like they came from legitimate distributors by removing labels with the patients’ names on them and by sometimes backdating expiration dates, authorities said. The pills would eventually make their way to front companies that supplied pharmacies.
The investigation relied in part on a cooperator who was arrested last month during a raid on a storage facility in North Bergen, N.J., the complaint said. During the search, agents discovered 10,369 pill bottles and hundreds of counterfeit labels.
The medicaid system is like a blank check. Recipients with straight medicaid often have little limits on drug use while many working stiffs have $60 copays for expensive drugs-If they are covered at all.
I think those that flagrantly abuse the system should be excluded from all medical care.
I also think their MDs should be considered to see if they knowingly prescribed drugs they knew were destined for resale. HIV patients often get cocktails so it would be hard to know for sure.
The whole healthcare system is wrong because there is no healthcare system. Its a private enterprise where profit means more than human health. Research is costly but other countries have great research scientists and groups like Israel, Canada, Cuba(surprise, surprise). I don’t paint everything in black color because some elements of American Medicine are great. In general though its bad since there is no healthcare system. I am actually for free market economy but healthcare does not belong there.
I have yet to find a doctor that cares about the patient. Don’t feel bad for the drug companies they have plenty of money. So much so that the drs are given money, gifts & expensive vacations to push pills to patients. In a lot of ways the medical world has come forward, but in other ways it’s gone backwards. Check out drmercola.com if you’d like to be enlightened. Btw there are natural stuff that can cure strep, & no, medicine will not cure it. It will only suppress it & it’ll come right back when the immune system is compromised again. Speaking from my own experience
The problem is with the doctors also.
I went to a doctor that took my insurance. A few weeks later, I received a letter from the insurance company, that they denied the claim and took their payment of $96 back.
The doc’s office sent me a detailed bill for over $600!
When I spoke to the office and told them that I will give them the amount insurance paid, they wouldn’t hear of it, and told me they are going to send it to collections! Ganovim!
Is this how a yid should run his office? Nowadays a yarmulka means nothing! Don’t be fooled!
That is the true fraud!!!