Amazon subsidiary PillPack reaches a settlement with US government and will have to shell out over $5.6M – Endpoints News

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Ama­zon’s on­line phar­ma­cy has set­tled a law­suit in New York af­ter al­le­ga­tions of over­billing for the life­sav­ing drug in­sulin.

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The set­tle­ment re­solves al­le­ga­tions that the phar­ma­cy, known as Pill­Pack, im­prop­er­ly billed gov­ern­ment health­care pro­grams like Medicare and Med­ic­aid for more in­sulin pens than pa­tients need­ed ac­cord­ing to their pre­scrip­tions, and for false­ly un­der-re­port­ing the days in­sulin sup­plies were dis­pensed.

Un­der the set­tle­ment, Pill­Pack has agreed to pay ap­prox­i­mate­ly $5.6 mil­lion to the US gov­ern­ment and over $175,000 to oth­er states that were fraud­u­lent­ly over­billed for in­sulin. As a part of the set­tle­ment, Pill­Pack has al­so ad­mit­ted and ac­cept­ed re­spon­si­bil­i­ty for cer­tain con­duct, in­clud­ing that it dis­pensed in­sulin pens that ex­ceed­ed im­posed days-of-sup­ply lim­its.

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Dami­an Williams

“Phar­ma­cies are trust­ed to pro­vide ac­cu­rate in­for­ma­tion to Gov­ern­ment health­care pro­grams and to pre­vent waste when dis­pens­ing med­ica­tions to pa­tients. Pill­Pack abused this trust by dis­pens­ing in­sulin re­fills long be­fore pa­tients need­ed them and by false­ly re­port­ing the days of sup­ply of in­sulin ac­tu­al­ly dis­pensed to pre­vent its claims for re­im­burse­ment from be­ing de­nied,” US at­tor­ney Dami­an Williams said in a state­ment.

Ac­cord­ing to the gov­ern­ment, Pill­Pack sought re­im­burse­ment for in­sulin pens, but it was re­quired to re­port the quan­ti­ty dis­pensed and the days of sup­ply.

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In­stead of ac­cu­rate­ly re­port­ing the days of sup­ply and con­tact­ing the Cen­ters for Medicare and Med­ic­aid Ser­vices, the gov­ern­ment al­leged that Pill­Pack would dis­pense and bill for the full car­ton and re­duce the days of sup­ply re­port­ed to the gov­ern­ment pro­gram to con­form to the lim­it. As a re­sult, for those claims, Pill­Pack re­port­ed days-of-sup­ply da­ta to GH­Ps that were dif­fer­ent from, and low­er than, the days-of-sup­ply that should have been re­port­ed.

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From April 2014 through Nov. 2019, Pill­Pack’s gen­er­al prac­tice was to dis­pense in­sulin pens to pa­tients us­ing full car­tons. Pill­Pack would dis­pense and bill for the full car­ton and false­ly un­der­re­port the days of sup­ply to make it ap­pear that the dis­pens­ing did not vi­o­late the pro­gram’s days-of-sup­ply lim­it.

This prac­tice of un­der-re­port­ing al­so led Pill­Pack to dis­pense pre­ma­ture re­fills to pro­gram ben­e­fi­cia­ries, which led to fre­quent­ly dis­pensed in­sulin pen re­fills days or weeks be­fore pa­tients need­ed them ac­cord­ing to their pre­scrip­tions.

Pill­Pack, which was ac­quired by Ama­zon in 2018, was brought un­der Jeff Be­zos’ fold dur­ing a time when he, Berk­shire Hath­away and JP Mor­gan were try­ing to think up ways to dis­rupt the US health­care sys­tem. While Pill­Pack was not a part of that ven­ture, Ama­zon in­her­it­ed Pill­Pack’s phar­ma­cy li­cens­es in all 50 states, be­com­ing a play­er in the phar­ma­cy de­liv­ery ser­vice.

How­ev­er, Pill­Pack’s set­tle­ment al­so comes at a time when the av­er­age re­tail price for in­sulin has risen dra­mat­i­cal­ly over the years, over 54% from 2014 to 2019, ac­cord­ing to GoodRx.

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