A Lodi oncologist and his wife, who served as the doctor’s office administrator, have paid the United States $300,000 to settle allegations that they improperly billed Medicare for certain chemotherapy drugs purchased from an unlicensed foreign pharmaceutical distributor, Acting United States Attorney Phillip A. Talbert announced today.

The United States alleged that, between October 2010 and May 2011, Dr. John F. Kiraly and Rena Kiraly billed and received reimbursement from Medicare for such drugs in violation of the federal False Claims Act. Specifically, the Kiralys purchased chemotherapy drugs from Warwick Healthcare Solutions Inc., also known as Richards Pharma, a former United Kingdom-based drug distributer that distributed non-FDA approved drugs throughout the United States. The Kiralys administered certain of these drugs to their patients, billing Medicare. One medication they purchased from Warwick was Altuzan, a drug not approved by the FDA. In addition, the FDA tested a batch of Altuzan that the Kiralys had purchased from Warwick and determined that it was counterfeit, lacking the active ingredient bevacizumab.

“Our District has now pursued and resolved False Claims Act allegations against three doctors for improperly billing Warwick drugs to public insurers,” said Acting U.S. Attorney Talbert. “These cases demonstrate the commitment of our district to preserving the integrity of federal health care programs and ensuring that doctors participating in such programs provide their patients with safe and effective care.”

“Patients getting life-saving prescriptions from their doctors must be able to trust that their medicines have been FDA-proven as safe and effective,” said Steven Ryan, Special Agent in Charge of the Office of Inspector General of the U.S. Department of Health and Human Services. “Our investigators tirelessly pursue those who ignore requirements protecting patient health in order to increase profits.”

“Patients receiving cancer treatment drugs should be able to trust that these drugs have been the subject of the FDA-approval process, which requires that the drugs have been proven to be safe and effective for treating their medical conditions,” said Lisa L. Malinowski, Special Agent in Charge, FDA Office of Criminal Investigations’ Los Angeles Field Office. “The FDA will continue its vigilance over the prescription-drug supply chain to ensure that the drugs reaching patients have been proven to be both safe and effective, and that those who attempt to circumvent the agency’s oversight will be brought to justice.”

The case was investigated by the U.S. Department of Health and Human Services Office of Inspector General and the FDA’s Office of Criminal Investigations. Assistant United States Attorney Vincente A. Tennerelli represented the United States in this matter. The claims settled by this agreement are allegations only, and there has been no determination of liability.

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