July 20, 2013

162017_132140396847214_292624_nOn July 2, 2013, the U.S. Department of Justice announced that three former physician-partners of a Tennessee cancer clinic have agreed to pay a total of $4.25 million to resolve allegations that they violated the federal False Claims Act by knowingly submitting or causing the submission of false claims to Medicare and to Tennessee’s Medicaid program for misbranded, unapproved chemotherapy drugs that were administered through their cancer clinic.

In December 2012, the physician-manager of the cancer clinic, who agreed to pay $2.55 million of the $4.25 settlement, pleaded guilty to receiving misbranded drugs with the intent to defraud or mislead in violation of the federal Food, Drug and Cosmetics Act, and he was sentenced in June 2013 to serve 24 months in federal prison. His two minority-owner partners were not criminally charged but are responsible to pay $850,000 each towards the settlement.

The false claims allegations span the period from 2007 to early 2008 and from August 2009 to February 2012. It was alleged that the cancer clinic purchased a substantial amount of chemotherapy and other drugs from a distributor in Canada that had obtained the drugs from foreign sources and that the manufacturers of the drugs were not registered with and approved by the FDA, in violation of the federal Food, Drug and Cosmetics Act. It was further alleged that the drugs were misbranded because the labeling was in foreign languages or the labeling failed to state dosage information, which are also violations of the Food, Drug and Cosmetics Act.

It was claimed that the Tennessee cancer clinic purchased the foreign drugs for substantially below what drugs from legitimate U.S. drug manufacturers and distributors would have cost, and that the three cancer clinic physician-partners administered the foreign-obtained drugs to their patients and then the cancer clinic submitted claims for reimbursement for the drugs to Medicare, the Tennessee Medicaid program, and other government health benefit programs. Because such foreign drugs were not covered by Medicare and the other health benefit programs, it was alleged that the reimbursement claims that the three Tennessee physicians submitted violated the federal False Claims Act and the similar Tennessee state false claims act.

In announcing the settlements, the U.S. Attorney’s Office stated, “Medical practices that administer prescription drugs from non-FDA approved foreign sources are putting patients at risk of exposure to counterfeit, contaminated, ineffective and potentially dangerous medications. This case is an example of the efforts the government will continue to make to minimize the chance of patients receiving such unsafe medication as well as to ensure that Medicare and other health benefit programs do not pay for unapproved drugs.”


If you or a family member may be the victim of medical malpractice in Tennessee, you should promptly seek the legal advice of a Tennessee medical malpractice attorney who may agree to investigate your possible medical malpractice claim for you and file a Tennessee medical malpractice claim on your behalf, if appropriate.

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