Pharmacy company in Philly charged with $2 million fraud scheme involving unregulated HIV medications
Surnil Pharmacy, Inc., which primarily operated as Haussemann’s Pharmacy, is accused of fraudlently obtaining Medicaid and Medicare reimbursements.
A pharmacy company in Philadelphia has been criminally charged in an alleged $2 million scheme to defraud Medicaid and Medicare through reimbursements for unregulated HIV medications.
Surnil Pharmacy Inc., which primarily operated as Haussemann’s Pharmacy, is accused of obtaining the reimbursements by fraudulently claiming the HIV medications were from legitimate distributors, Pennsylvania Attorney General Dave Sunday announced Wednesday.
Haussemann’s Pharmacy, which was located at Sixth Street and Girard Avenue, has since closed.
Surnil Pharmacy Inc., which is owned by Subhash Patel, is charged with three counts of Medicaid fraud, one count of theft by deception, and one count of violating the Controlled Substance, Drug, Device, and Cosmetics Act.
In response to an Inquirer question about why Patel was not charged personally, Brett Hambright, communications director for the attorney general, said in an email that the “evidence uncovered led to the decision that the charges were most appropriately brought against the pharmacy as opposed to any individual.”
Matthew Taylor Wilkov, the attorney representing Surnil Pharmacy and Patel, declined to comment on the case.
Sunday said that other pharmacies owned by Patel — West Girard Health Pharmacy, East Lehigh Health Pharmacy, Frankford Health Pharmacy, and 11th and Walnut Pharmacy — have also since closed.
Haussemann’s Pharmacy had been described as Philadelphia’s oldest surviving pharmacy, the Philadelphia Gay News reported in 2013 as part of an obituary for Marc Garber, who had been the owner.
(Frederick W. Haussmann, a German immigrant, became the owner of an existing pharmacy at Sixth and Girard that later bore his name, including with an alternate spelling, in 1918, according to documents maintained by the German Society of Pennsylvania.)
Garber “was big on giving out medication to HIV/AIDS patients if they couldn’t afford it,” Garber’s sister, Randee Solomon, told PGN. “He would just give it to them for free. He would pay the cost.”
It is unclear when Surnil Pharmacy and Subhash Patel took over Haussemann’s Pharmacy.
The attorney general’s criminal case was filed Tuesday in Philadelphia Municipal Court.
“This pharmacy cut corners to maximize profits while putting patients at risk and defrauding taxpayers who fund the Medicaid program,” Sunday said in the statement Wednesday.
“Our thorough investigation revealed that patients who depended on these life-saving medications were, in reality, receiving diverted, or unregulated, drugs that the pharmacy obtained from unknown, unapproved sources,” Sunday said.
Sunday noted that the investigation found no evidence of individuals who experienced physical harm or illness due to these dispensed medications.
According to Sunday, agents interviewed Haussemann’s employees who said that the owner, Patel, was acquiring expensive HIV medications from a source other than one of Haussemann’s legitimate wholesale drug suppliers.
The investigation found that nearly 100,000 tablets of HIV medications dispensed at the pharmacy were not obtained through documented purchases from authorized distributors, Sunday said.
The case is being prosecuted by the Pennsylvania Office of Attorney General Medicaid Fraud Control Section, Sunday said.