According to the U.S. Attorney’s office, a La Jolla oncologist and his medical practice pled guilty this month in connection with a scheme to import unapproved foreign cancer drugs at a deep discount, dispense them to unwitting patients, bill Medicare as if the drugs were legitimate, and pocket the profits.
In a hearing before U.S. Magistrate Judge Bernard Skomal on Jan. 15, Dr. Joel I. Bernstein pled guilty to a single count of introducing an unapproved drug into interstate commerce — in this case, a cancer drug called “Mabthera” intended for market in Turkey — and administering it to patients. The approved U.S. drug with the same active ingredient is Rituxan, which is used to treat lymphomas and leukemias such as non- Hodgkin lymphoma and chronic lymphocytic leukemia. Bernstein was released pending sentencing, which is scheduled for April 16.
In addition, his medical practice, Dr. Joel I. Bernstein, M.D. Inc., also pled guilty before U.S. District Judge Cathy Ann Bencivengo to one count of health care fraud. According to the plea agreement with the corporation, employees purchased $3.4 million in foreign cancer drugs, knowing they had not been approved by the U.S. Food and Drug Administration for use in the United States.
From 2007 to 2011, Bernstein’s office purchased the drugs for significantly less than market value in the U.S. and then submitted claims to Medicare at the full reimbursement price. To conceal the scheme, the office fraudulently used Medicare reimbursement codes for approved cancer drugs, as Medicare does not pay for unapproved drugs.
The plea agreement also calls for $1.7 million in restitution to Medicare, plus forfeiture of $1.2 million in profits. The medical practice is scheduled to be sentenced May 17. In addition, the government has also filed a False Claims Act lawsuit in District Court against Dr. Bernstein and his medical corporation for submitting false claims to the Medicare Program for these unapproved drugs. According to this civil complaint, the Medicare Program was defrauded of over $1.7 million, and under the False Claims Act, the United States can recover triple the amount of damages plus monetary penalties.
The FDA’s Office of Criminal Investigations (OCI) currently has more than 200 investigations nationwide involving schemes in which medical practices purchase foreign, unapproved drugs and dispense them to unsuspecting patients for personal financial gain.
Unlike traditional prescription drugs, which are dispensed to the patient by a pharmacy, oncology drugs are typically infused into a patient without the patient ever seeing the box it came in, or any of the related labeling.
“In a worst-case scenario, chemotherapy drugs that have not been approved by the FDA may be fake, ineffective, unsafe, and dangerous,” U.S. Attorney Laura Duffy said.
— Staff Reports