Pennsylvania court affirms dismissal of topical cream fraud case

Liberty Mutual Group failed to introduce evidence to support allegations that a group of pharmacies, pharmacists and doctors created a fraudulent scheme to prescribe topical creams to injured workers in exchange for kickbacks, the Pennsylvania Superior Court ruled Tuesday.

The appellate court, in affirming an earlier ruling, said there was no proof that doctors broke the law by using pharmacies in which they held minority interests to dispense topical pain creams they prescribed to injured workers and people hurt in car crashes, according to documents in Liberty Mutual Group et al. v. 700 Pharmacy et al., filed in Harrisburg.

Liberty and its related companies in 2017 sued dozens of pharmacies, pharmacists and providers alleging the topical pain creams were formulated for the sole purpose of generating profits and that doctors were receiving illegal kickbacks.

The complaint alleged the pharmacies produced large amounts of compound creams in pre-set formulations rather than individually tailoring each prescription to the specific needs of a patient. Providers made false and fraudulent misrepresentations about the medical necessity for the topical creams, and they received kickbacks in the form of dividends from pharmacies, according to the complaint.

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