The Rhine Drug Company (Rhine) and its owner Carter Clements agreed last week to a settlement with the U.S. Attorney’s Office for the Southern District of Georgia to resolve allegations of violating the False Claims Act and Controlled Substance Act. Rhine and Clements will pay $2.175 million, making it the largest False Claims Act recovery with a pharmacy or pharmacist and the largest recovery of civil penalties under the Controlled Substances Act in the history of the Southern District of Georgia.
The Drug Enforcement Agency (DEA) initially raided Rhine in February 2016, based on an investigation by the Department of Health and Human Services, Office of the Inspector General (HHS-OIG), the DEA, and the U.S. Attorney’s Office for the Southern District of Georgia. Based on that investigation, Rhine and Clements were alleged to have violated the False Claims Act by submitting claims to Medicare for drugs that Rhine did not dispense to patients. Violations of the Controlled Substances Act were also alleged based on the failure to make, keep, or furnish certain records as required under federal law.
Rhine and Clements fully cooperated with the investigation and have admitted no wrongdoing. However, Acting U.S. Attorney James Durham noted, “Pharmacists are supposed to bill only for what they dispense and they’re to keep accurate records of the prescription drugs they let walk out of their pharmacies. The U.S. Attorney’s Office will hold accountable those pharmacists and pharmacies that seek financial gains at the expense of the public by cutting corners.”
Rhine, a small pharmacy that has served a rural area of Georgia since 1906, has learned a costly lesson for its failure to comply with applicable federal laws. The FisherBroyles Health Care and Pharmacy Law team offers complete compliance reviews for pharmacists, pharmacies, and health care providers across the U.S. and can provide counsel regarding both state and federal regulations. Please contact any of the following attorneys for assistance: