Pharmacy fraud is a fraud that happens when there is a mistake of fact regarding prescriptions. In these cases, the other party relies upon false information about the prescription to their detriment.

What are Some Examples of Pharmacy Fraud?

Pharmacy fraud can happen in a variety of different ways. All it takes is a false representation and someone relying upon that false representation. Some examples may include:

  • Billing for a nonexistent prescription;
  • Prescription drug switching;
  • Sending multiple bills to different payers for the same prescription;
  • Billing for a brand name drug when a generic drug was given to the customer; and/or
  • Filling less than the quantity prescribed in the prescription.

These are only a few examples—there are many other ways that pharmacy fraud may occur.

What is a Whistleblower?

You may have heard the word "whistleblower" before in the news. A whistleblower is someone who reports their employer to the authorities for breaking the law. Often the whistleblower will report their employer's illegal activities to a government agency.

Many times the reports will go to a government agency that regulates that industry, such as the FDA or EPA. Some employees in the pharmacy industry have also reported their employers for pharmacy fraud.

What is Fraud?

Basic fraud happens when a person intends to deceive another person by making false representations of fact. Fraud does not have to be outright lies--it can include half-truths or truths told at a slant, with the intent to gain something either personally or financially. The other person has to rely on those false statements and suffer a loss, usually parting with something of value because of those false statements.

An example of fraud may be selling a car that the seller knows has problems, yet claims that it runs great. Another example may be when a person forges a check stolen from someone else. Fraud does not have to be an affirmative lie, though. Failing to point out a material mistake can also be considered fraud, if the other person in the transaction relies on that mistake to their disadvantage. Depending on where you live, fraud can either be a criminal offense or a civil wrong.

What are the Penalties for Fraud?

Depending on where you live and the type of fraud that occurs, there are different penalties for fraud. Another factor that can be considered is the loss that the victim suffers as a result of the fraud. Common penalties for fraud include:

  • Incarceration.  Prison or jail sentences often depend on the severity of the crime. Federal fraud charges can carry very long prison terms.
  • Probation is a common penalty for first time offenders, or instances of fraud that resulted in small losses. Sometimes probation is ordered in combination with prison or jail time.
  • Fines are a common penalty for fraud, with the amount depending on the circumstances of the individual case. Fines can range from between $1000 to $10,000.
  • Restitution is another common penalty for fraud, which requires the person convicted of the crime to pay back the amount that was taken from the victim. Depending on the circumstances, the judge may allow restitution to be made on a payment plan or schedule.

Of course, these penalties depend greatly on where the fraud took place as well as the type of fraud and amount that was stolen or taken as a result of the fraud. In many states, fraud can also be part of a civil action in addition to being a criminal charge.

What is Prescription Switching?

Prescription switching involves switching one drug for a less expensive prescription drug while still charging for the more expensive drug. The drug that's given does not have to be the generic form--just less expensive than the drug that's prescribed.

Because the person receiving the prescription believes that they are receiving the more expensive drug (and that's what they have been billed for), this is an example of pharmacy fraud.

Is Medicaid or Medicare Fraud Associated with Pharmacy Fraud?

Yes, Medicaid and Medicare fraud are associated with pharmacy fraud. Medicaid or Medicare fraud involves a company billing the government for health services, treatments, or prescriptions that never happened or were never delivered.

Examples of this may include auto-refilling a prescription, even when the patient did not ask for a refill. The pharmacy then bills Medicare for the prescription that the patient never picks up.

Another example may involve the pharmacy filling a patient's prescription with a medication different from what their doctor prescribed. Switching a patient's prescription for tablet medications to capsules (or switching capsules for tablets) is considered wrongfully taking money from the government, and can be considered Medicaid fraud as well.

Should I Talk to a Lawyer If I Have Been Charged with Pharmacy Fraud?

Pharmacy fraud is a serious offense. If you have been accused of pharmacy fraud, it is in your best interests to contact a qualified criminal lawyer. An experienced lawyer near you can help you navigate the legal system, and inform you of your rights in the situation.

Having an attorney by your side in the situation can also help you defend yourself and your business against pharmacy fraud charges.