Roche sues pharmacies, supply companies

Friday, March 31, 2017

INDIANAPOLIS – Roche Diagnostics and Roche Diabetes Care have filed a lawsuit in the U.S. District Court of Indianapolis, claiming they have wrongfully paid millions of dollars in rebates and lost millions of dollars in legitimate sales for blood glucose test strips at the hands of an alleged scheme by six pharmacies and medical supply companies. The lawsuit charges the pharmacies and medical supply companies with allegedly obtaining test strips from Roche that were intended for reimbursement under DME plans but were sold for retail under pharmacy plans, according to the Indianapolis Business Journal. Test strips under pharmacy plans have a higher list price than strips under DME plans, but pharmacy plans receive larger rebates. “By purchasing strips from Roche at the lower DME list price and diverting them to sale in channels where they would be reimbursed at the much higher pharmacy plan rate, defendants and their co-conspirators made millions of dollars in illicit profits,” the lawsuit charges. Several defendants, including Binson’s Hospital Supplies of Centerline, Mich., and J&B Medical Supply of Wixom, Mich., had allegedly promised to sell the DME test strips only through DME channels, according to the lawsuit. Through a spokesman, J&B Medical said it stopped purchasing test strips from Roche in 2009. "This coincided with the FDA issues with the strips and numerous insurance companies asking J&B to stop purchasing from Roche," he said in an email. "Bottom line, J&B did not purchase from Roche during the timeframe detailed in the lawsuit." J&B said it its 100% confident it will be exonerated and removed from the lawsuit, the spokesman said. The other defendants named in the lawsuit were Northwood of Centerline; Olympus Global of East Lansing, Mich.; Delta Global of Flint, Mich.; and Alpha XE of Cheyenne, Wyo.