Fagron to pay $22M to settle claims it inflated prices

Fagron agreed to pay $22.05 million to resolve allegations that its subsidiary, Freedom Pharmaceuticals, intentionally inflated average wholesale prices for its ingredients to increase reimbursements from federal healthcare programs.

Freedom's pricing scheme enabled its pharmacy customers to bill federal healthcare programs thousands of dollars per prescription for some compound formulations.

For example, the subsidiary set the average wholesale price for its ingredient Fluticasone Propionate at $3,500 per gram, even though it typically sold the ingredient for about $160 per gram.

The settlement, announced by the U.S. Justice Department Nov. 7, also resolves allegations that another Fagron subsidiary, Pharmacy Services, and its pharmacy affiliates submitted fraudulent compound prescription claims to federal healthcare programs, used sham insurance programs to manipulate pricing, paid kickbacks to physicians for bogus consulting agreements and illegally waived copays.

The settlement also addresses allegations against another Fagron subsidiary, B&B Pharmaceuticals, for setting an inflated average wholesale price for Gabapentin.

Read the full news release here.

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