Compounded medication is a hot topic in our industry these days, especially because they are hard to regulate, they can be very expensive, and a lot of times they may not even be needed. Still, some people may want to take compound drugs if they are unable to swallow pills or if they do not respond to other treatments. It is a tough situation because compounding drugs opens the door to fraud, and just last week a group of people in Texas and Arizona were federally indicted because they were part of a big compound drug fraud scheme against Tricare, a health insurance program for military and their families.

In addition to the two people charged in February, 10 more people were federally indicted for their involvement in the $100 million scheme. There were two doctors named as part of the 35 count indictment. All were charged with conspiring to sell patients compound treatments for pain, scars, migraines or vitamin supplements. These treatments were expensive and unnecessary in many cases. The people involved in the scam would pay kickbacks to prescribing doctors or marketers, allegedly as much as $60 for a tube of pain or scar cream and $30 for vitamin compounds. The money for the drugs would come from Tricare, a federal insurance program that covers both active-duty and retired military members and their families. These kickback payments went on from May 2014 to February 2016.

The company CMGRX was founded by several of the defendants, and was a compound drug marketing group. As part of their marketing materials they used a study that they had done with military members and their families that they claimed was a test of drug safety and effectiveness, a Patient Safety Initiative that they said Tricare had approved. Authorities say they compensated participants who received compound medications with their Tricare coverage, and the real point of the study was to get a database of patients and payments so they could provide payments to the people in their study. They provided kickbacks to doctors that wrote prescriptions, who they said were participating in the study, and involved pharmacies that paid them a portion of proceeds they made from patients who came to them for compound drugs reimbursed through Tricare. The study was not approved by Tricare, there were no medical professionals involved and they did not collect data related to drug safety or effectiveness.

Each defendant was charged with one count of conspiracy to commit health care fraud and at least one count of payment or receipt of illegal remunerations, and two of the defendants were charged with 14 counts of payment or receipt of illegal remunerations.

Check out the release by the United States Justice Department to learn more.