U.S. Attorney's Office
District of Massachusetts
(617) 748-3100
July 7, 2015

Former Warner Chilcott Sales Manager Pleads Guilty to Conspiracy to Commit Health Care Fraud

BOSTON—A former district manager of Warner Chilcott Sales U.S., LLC (Warner Chilcott), a pharmaceutical company based in Rockaway, N.J., pleaded guilty today in U.S. District Court in Boston in connection with a scheme to deceive insurance companies and Medicare so that they would cover the costs of Warner Chilcott’s osteoporosis medications, Actonel and Atelvia.

Jeffrey Podolsky, 48, of East Meadow, N.Y., pleaded guilty before U.S. District Court Chief Judge Patti B. Saris to an information charging one count of conspiracy to commit health care fraud.

Actonel and Atelvia belong to a class of pharmaceuticals known as bisphosphonates, which physicians prescribe for the prevention and treatment of osteoporosis. There are few, if any, clinical differences between most bisphosphonates on the market, including the generic version. For that reason, in 2010 and throughout 2011, many insurance companies did not include Actonel or Atelvia on their pharmaceutical formularies. The only way to get a prescription for Actonel or Atelvia paid for by an insurance company was through a prior authorization, which required the prescribing physician to explain to the insurance company why the non-formulary drug was medically necessary for the patient, as opposed to the generic version or any other bisphosphonate on the market.

Beginning in 2010 and throughout 2011, Podolsky directed the sales representatives in his district to fill out prior authorizations for physicians who prescribed Actonel and Atelvia using false clinical justifications as to why the patient needed Warner Chilcott drugs and submit them to health insurance companies. In some instances, Podolsky’s sales representatives reviewed patients’ medical charts to get the information necessary to fill out the prior authorizations, in violation of the Health Insurance Portability and Accountability Act (HIPAA). Podolsky also directed sales representatives to utilize a website to submit prior authorizations to insurance companies to disguise their identity as pharmaceutical sales representatives. Podolsky and the sales representatives that he supervised knew that they should not be involved in the preparation or submission of prior authorizations.

As a result of the scheme that Podolsky directed, insurance companies and Medicare paid at least $200,000 for Actonel and Atelvia prescriptions that were not medically necessary and would not have been paid but for the false information submitted by Warner Chilcott sales representatives.

The charging statute provides a sentence of no greater than 10 years in prison, three years of supervised release, a fine of $250,000 or twice the gross loss to the Medicare program or twice the gross gain to Podolsky (whichever is greater), forfeiture of any proceeds of the offense, and exclusion from the Medicare program. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Carmen M. Ortiz; Antoinette V. Henry, Special Agent in Charge of the Food and Drug Administration, Office of Criminal Investigations, Metro Washington Field Office; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Phillip Coyne, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of the Inspector General; Leigh Alistair Barzey, Assistant Special Agent in Charge of the Department of Defense, Office of Inspector General, Defense Criminal Investigative Service, Northeast Field Office; Scott Rezendes, Special Agent in Charge of the U.S. Office of Personnel Management, Office of Inspector General, Office of Investigations; and Jeffrey Hughes, Special Agent in Charge of the U.S. Department of Veterans Affairs, Office of Inspector General, Northeast Field Office, made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys Miranda Hooker and David S. Schumacher of Ortiz’s Health Care Fraud Unit and Sonya Rao of Ortiz’s Civil Division.

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