Roche, pharmacies clash over 'unwarranted' rebates

INDIANAPOLIS - A judge has sided with Roche Diagnostics and issued a court order preventing a pharmacy network from dispensing Accu-Chek Test Strips, according to court documents.

The order, issued by the U.S. District Court for the Northern District of Alabama on Sept. 17, is in response to a lawsuit filed by Roche against Priority Healthcare Corp., a network of pharmacies in Alabama, Mississippi and Arkansas.

In the lawsuit, filed Sept. 11, Roche says it paid $37.5 million of “unwarranted” rebates to insurance companies and their pharmacy benefit managers for claims submitted by PHC between Jan. 1, 2013, and the end of the first quarter of 2018.

Furthermore, Roche says PHC is controlled by an individual who was convicted of criminal insurance fraud in 2010 and banned by the federal government from providing mail-order diabetes supplies to Medicare beneficiaries in 2016. His wife is listed as the owner of PHC, to hide her husband's involvement, according to the lawsuit. Both are among the individuals listed as defendants.

“Over the past several years, defendants, operating through a shifting collection of corporate entities that they constantly shuffle in order to avoid detection have submitted nearly 800,000 insurance claims for retail blood-glucose test strips manufactured by Roche,” the lawsuit states.

Roche says among the tens of thousands of insurance claims submitted by PHC, many were for retail test strips, when not-for-retail test strips were dispensed. It says a substantial number of insurance claims remain unaccounted for.

“It is impossible to know what, if anything, Priority Care is actually dispensing to the majority of its patients,” the lawsuit states.

The judge has ordered both parties to meet for mediation by Oct. 17.

A spokesperson for Roche, which is represented by Patterson Belknap Webb & Tyler, said the company does not comment on pending litigation.