AlixaRx LLC agrees to pay $2.75 million to resolve allegations that it improperly dispensed controlled substances at long-term care facilities

ATLANTA – AlixaRx, LLC, a national provider of pharmacy services to long-term care facilities, has agreed to pay the United States $2.75 million to resolve allegations that it violated federal law by, among other things, allowing opioids and other controlled substances to be dispensed without valid prescriptions between January 1, 2014 and December 13, 2017.

“The requirements of the Controlled Substances Act exist to ensure that dangerous drugs are not abused or diverted outside the DEA’s closed system of distribution,” said Acting U.S. Attorney Kurt R. Erskine.  “As this settlement makes clear, these requirements are not optional, and our office will vigorously pursue claims against registrants that place their own bottom line over the safety of our citizens.”

“AlixaRx, LLC spun a web of deception when it engaged in unlawful dispensing practices by abusing the emergency prescription provisions of the Controlled Substance Act,” said the Special Agent in Charge of the DEA Atlanta Field Division Robert J. Murphy. “Such behavior allows for substances to be diverted and sold on the black market with no true measure of accountability. This civil penalty is a proactive step that DEA Diversion and its law enforcement partners can take to discourage other healthcare providers from engaging in such behavior.”  

“The opioid epidemic has devastated communities, families, and individuals across our country. Health care providers who fail to secure these powerful drugs as required do a tremendous disservice to our society and will be held accountable for their actions,” said Special Agent in Charge Derrick L. Jackson of HHS-OIG.  “Working closely with our law enforcement partners, our oversight agency will continue to investigate such allegations to protect federal health care programs and the public.”

“This resolution sends a message that there are rules to be followed when dispensing controlled substances,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “The FBI and our law enforcement partners make it a priority to protect patients from being supplied drugs without valid prescriptions.” 

AlixaRx is a pharmacy company that dispenses prescription drugs, including controlled substances, to long-term care facilities, primarily through on-site automatic dispensing units (“ADUs”).  AlixaRx supplied these ADUs with drugs through seven regional hubs located throughout the country.  Each hub, as well as each ADU, was separately registered with the DEA as a pharmacy able to dispense controlled substances.

The Government alleged that AlixaRx violated the federal Controlled Substances Act (“CSA”) in its dispensing pursuant to purported “emergency prescriptions.”  In nearly all circumstances, Schedule II controlled substances require a written prescription by a physician, and refills are not permitted by law.  The CSA allows pharmacists to dispense Schedule II controlled substances, such as opioid pain medications, without a written prescription only in true emergency situations and, even then, only for the quantity of drugs necessary to treat the patient during the emergency period.  Emergency prescriptions must promptly be reduced to writing and signed by an authorizing physician within seven days of issuance.  Failure to meet these requirements results in an illegal dispensing of controlled substances without a valid prescription.

The Government’s investigation revealed that AlixaRx routinely abused the emergency prescription provisions of the CSA by requesting and obtaining verbal “emergency” refills from prescribers, in the absence of any true emergency.  Instead, the company used these purported emergency prescriptions to effectuate simple refills of the patients’ medications.  Moreover, AlixaRx routinely failed to obtain written prescriptions within seven days after the verbal authorization.  Rather than disclose these violations to the DEA as required by law, AlixaRx engaged in a nationwide scheme to cover up its violations by obtaining backdated prescriptions from the prescribing physicians, in many cases over a year after the controlled substances were dispensed.

Finally, the Government resolved allegations that AlixaRx submitted false claims to Medicare for invalid emergency prescriptions, as discussed above.  The Government also resolved claims that AlixaRx billed Medicare Part D for claims that had already been reimbursed through claims paid to long-term care facilities under Medicare Part A.

The settlement resolves a lawsuit filed in the U.S. District Court for the Northern District of Georgia by a former pharmacist at AlixaRx’s Atlanta hub under the qui tam or whistleblower provisions of the False Claims Act, which permit private citizens to bring lawsuits on behalf of the United States and obtain a portion of the government’s recovery. 

This case was investigated by the U.S. Attorney’s Office for the Northern District of Georgia, the Drug Enforcement Administration’s Diversion Control Division, Atlanta Field Office, the Department of Health and Human Services – Office of the Inspector General, the Federal Bureau of Investigation, and the Defense Criminal Investigative Service.

The case was handled by David A. O’Neal, Assistant U.S. Attorney and Opioid Coordinator for the Northern District of Georgia.

The case is captioned United States ex rel. Gharavi v. AlixaRx LLC et al., 1:17-CV-00455-JPB.  The claims resolved by this settlement are allegations only and there has been no determination of liability.

For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6016.  The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.