Philadelphia Pharmacy and Its Owner Agree to Pay $1 Million to Resolve False Claims Act Liability

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Customer in pharmacy holding medicine bottle. Woman reading the label text about medical information or side effects in drug store. Patient shopping pills for migraine or flu. Vitamin or zinc tablets.

PHILADELPHIA, PA – United States Attorney Jennifer Arbittier Williams announced that the owner of LAN Apothecary, Inc. (“LAN Apothecary”) in Philadelphia has agreed to pay $1,000,000 to resolve liability under the False Claims Act.

LAN Apothecary and owner-pharmacist Bachtu (“Theresa”) M. Phan will jointly pay $1,000,000 to the federal government to resolve allegations that they violated the False Claims Act by billing Medicare for prescription medications that were not actually dispensed during the period from January 1, 2014 to June 29, 2019. These medications include, but are not limited to, Januvia, Janumet, Zetia, Tradjenta, Linzess, Advair Diskus, Namenda XR, and Dexilant. As part of the resolution with the United States, LAN Apothecary and Theresa Phan will enter into a corporate integrity agreement  with the Department of Health and Human Services, Office of the Inspector General. The integrity agreement requires them to undertake substantial compliance obligations and to contract with an Independent Review Organization that will conduct quarterly third-party audits of their Medicare and Medicaid claims and drug inventory.

“Pharmacies and pharmacists have a responsibility to serve as gatekeepers of a closed system of prescription drug distribution. That responsibility was allegedly abused for profit here,” said U.S. Attorney Williams. “Taxpayer dollars should be spent on needed medications, not wasted on fraud and abuse.”

“Pharmacies are responsible for all claims they submit to Medicare,” said Maureen R. Dixon, Special Agent in Charge of the Philadelphia Regional Office of the Department of Health and Human Services, Office of the Inspector General. “HHS-OIG and the U.S. Attorney’s Office take allegations of health care fraud seriously and will work together to ensure taxpayer dollars are only spent on bona fide medical claims.”

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The settled civil claims are allegations only. There has been no determination of civil liability.

This case was investigated by the U.S. Department of Health and Human Services Office of the Inspector General. It was handled by Assistant U.S. Attorney Deborah W. Frey and Auditor George Niedzwicki.    

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