Injured Workers Pharmacy to Pay $10M for Improper Handling of ‘Red Flag’ Prescriptions

Andover, Massachusetts-based Injured Workers Pharmacy (IWP) has agreed to pay $10 million to resolve allegations that it violated the Controlled Substances Act by improperly filling prescriptions for controlled substances, including opioids, and submitting false claims for payment to the Department of Labor (DOL).

In addition, IWP will enter into a five-year corrective action plan with the Drug Enforcement Administration (DEA).

Acting U.S. Attorney Joshua S. Levy said that as part of the settlement agreement, IWP admitted that between 2014 and 2019 it failed to adequately address prescriptions with “red flags,” including high doses of opioids, early refills and dangerous drug combinations, before dispensing them to injured workers. “Red flags” indicate prescriptions that may not have been issued for a legitimate medical purpose, such as abuse or diversion.

IWP previously settled a parallel investigation by the state attorney general into its dispensing practices for $11 million.

Levy said the settlement also concerns IWP’s claims for payment submitted to DOL, which administers the federal workers’ compensation program. In 2017, in an effort to curb opioid abuse among injured federal workers, DOL began reviewing claims and flagged concerning prescriptions – a process called a Drug Utilization Review (DUR). Before paying claims flagged for a DUR, DOL requires pharmacies to represent that a pharmacist or the prescribing medical professional addressed the concerns raised by the DUR.

IWP admitted that, between 2017 and 2019, IWP’s claims employees routinely represented to DOL that IWP consulted with prescribers about DURs when, in fact, IWP did not consult with those prescribers.

Under the terms of the settlement, over the next five years, DEA is allowed to conduct unannounced inspections of IWP without administrative inspection warrants. The DEA monitors pharmacy prescribing practices to ensure compliance with federal law.

To address issues uncovered in the investigation, officials said IWP has made improvements in its pharmacy practices, including developing additional procedures to review high-risk prescribing; increasing training for all employees; and eliminating production quotas for pharmacists and staff. The company also retained additional personnel to address high-risk prescribing.

“Last week brought disturbing reports that opioid overdose deaths only increased last year in Massachusetts. Pharmacies are on the front lines of the prescription pill and opioid epidemic devastating our communities,” said Levy. “Pharmacies that distribute dangerous prescription pills have a solemn responsibility to comply with measures enacted to curb abuse and addiction.”

Christopher J. Godfrey, director of the DOL workers’ compensation program, said the settlement allows his office to recover medical bill payments.