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What is Main Avenue Pharmacy
Main Avenue Pharmacy was a mail-order pharmacy with a storefront located in Clifton, New Jersey. The pharmacy gained significant attention due to its involvement in a multimillion-dollar fraudulent scheme centered around compounded medications.
Compounded medications are customized drugs created by pharmacists to meet specific needs that commercial medications may not fulfill. While compounding can serve legitimate medical purposes, it also presents opportunities for abuse, especially when targeting health insurance systems that offer higher reimbursements for these specialized medications.
Became Involved In An Illegal Kickback Scheme
From 2014 to 2016, Main Avenue Pharmacy became the epicenter of an illegal kickback operation, led by key individuals such as Jeffrey Andrews, the Chief Financial Officer, and Adam Brosius, the Director of Business Development, who later became the President of the pharmacy. The pharmacy used its platform to distribute prescription pads with highly profitable compounded drug formulas—ranging from scar creams and pain creams to migraine medications and vitamins. These formulas were selected based on their high reimbursement rates from insurance companies, including federal programs such as Medicare and TRICARE.
Marketers Fueled The Kickbacks
Main Avenue Pharmacy’s business model was heavily reliant on marketers, with whom it had contractual relationships. The marketers made financial arrangements with telemedicine companies and physicians, creating a cycle in which they generated prescriptions for compounded medications specifically designed to maximize insurance reimbursements. After filling the prescriptions, Main Avenue billed the health care programs and paid kickbacks to the marketers based on the volume of prescriptions and the amounts reimbursed.
Throughout the course of the scheme, the pharmacy ultimately received about $33 million in reimbursements for compounded medications. Notably, $5.8 million of that total came from TRICARE, a federal insurance program specifically for military personnel and their families.
Who Ran Main Avenue
Main Avenue Pharmacy was primarily run by two key individuals, Jeffrey Andrews and Adam Brosius, who played central roles in the management and operations of the pharmacy during the time it was engaged in a massive fraud scheme.
Jeffery Andrews
Andrews, who held the position of Chief Financial Officer (CFO), was responsible for overseeing the financial aspects of the business. His duties likely included managing the pharmacy’s accounts, handling financial strategies, and ensuring that the pharmacy’s business operations aligned with its financial goals. However, during the course of the fraud, Andrews used his position to facilitate illegal activities, such as orchestrating the financial side of the kickback scheme that would later lead to the pharmacy’s downfall.
Adam Brosius
Adam Brosius, on the other hand, initially served as the Director of Business Development before taking on the role of President of the pharmacy. In his leadership capacity, Brosius was responsible for the overall business strategy and the growth of Main Avenue Pharmacy. His role would have involved identifying new business opportunities, forming partnerships, and guiding the expansion of the pharmacy’s compounded medication sales. However, instead of promoting legitimate business practices, Brosius was instrumental in implementing the fraudulent schemes that brought in millions in illegal profits. He worked closely with marketers and telemedicine companies, setting up contracts that involved paying kickbacks in exchange for prescriptions filled for compounded medications, including scar creams, pain creams, and migraine medications.
The Investigation Into The Pharmacy
Several federal agencies, including the Federal Bureau of Investigation (FBI), the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), and the U.S. Department of Defense’s Defense Criminal Investigative Service (DCIS), spearheaded a comprehensive investigation into Main Avenue Pharmacy’s fraudulent activities.
This large-scale investigation unraveled a sophisticated kickback scheme that exploited federal health programs like Medicare and TRICARE, as well as private insurers, for millions of dollars. From the outset, investigators focused on how the pharmacy used compounded medications, deliberately designed and prescribed to exploit the high reimbursement rates offered by health insurance companies.
Revealed A Financial Relationship
The investigation revealed that Main Avenue Pharmacy, led by executives Jeffrey Andrews and Adam Brosius, systematically distributed prescription pads with predetermined formulas to marketers. These marketers, who had financial relationships with telemedicine companies and doctors, passed the pads along to generate large volumes of prescriptions for compounded medications. The pharmacy then filled these prescriptions and submitted them for reimbursement to insurers. The probe uncovered that once Main Avenue received these reimbursements, they paid kickbacks to the marketers based on the amount of money the pharmacy had obtained from insurers.
They Gathered Evidence Through Financial Records
The investigators gathered significant evidence through various methods, including financial records, contracts between the pharmacy and marketers, and communications that revealed Main Avenue’s business model was built on illegal kickback arrangements. They also discovered that the scheme specifically targeted federal health programs, with TRICARE alone paying over $5.8 million in fraudulent claims. The use of federal funds drew the attention of multiple agencies tasked with protecting taxpayer dollars, leading to their involvement in the case.
Why They Targeted TRICARE
The fraudulent scheme orchestrated by Main Avenue Pharmacy, led by Jeffrey Andrews and Adam Brosius, specifically targeted federal health programs like TRICARE, along with other private insurance plans, due to the high reimbursement rates these programs provided for compounded medications.
Who TRICARE Serves
TRICARE, a federal health insurance program for military personnel, veterans, and their families, was one of the primary targets because it offered particularly generous payments for compounded medications. These types of medications—custom-made formulations for individual patients—can command significantly higher reimbursements compared to standard medications, which made them attractive to those looking to exploit the system.
They Identify Which Drugs Make The Most Money
The scheme began by identifying compounded drugs that would yield the highest possible reimbursements from TRICARE and other insurers. These included pain creams, scar creams, migraine treatments, and various vitamins. After identifying the most profitable drug formulas, Main Avenue Pharmacy distributed pre-filled prescription pads with these formulas to marketers across the country. These marketers, contracted by Main Avenue, then passed the pads to telemedicine companies and doctors with whom they had financial relationships, encouraging them to prescribe the medications, regardless of whether patients actually needed them.
How Much TRICARE Paid Out
After filling these prescriptions, Main Avenue Pharmacy submitted claims for reimbursement to TRICARE and other health programs. Since compounded medications are often considered necessary for specific medical needs, insurers, including TRICARE, approved the claims and issued large reimbursements. TRICARE alone paid more than $5.8 million of the total $33 million the pharmacy received.
The Charges That They Face
The charges faced by Jeffrey Andrews, Adam Brosius, and their associates in the Main Avenue Pharmacy kickback scheme were serious and multifaceted, reflecting the magnitude of their involvement in defrauding federal health programs like TRICARE and other private insurers.
Authorities charged both Andrews and Brosius with multiple counts of conspiracy, including conspiracy to commit health care fraud and conspiracy to violate the Anti-Kickback Statute. These charges stemmed from their leadership roles in orchestrating an illegal kickback scheme that exploited compounded medication reimbursements for financial gain.
Healthcare Fraud
The first major charge they faced was conspiracy to commit health care fraud. Health care fraud involves intentionally deceiving health care programs to obtain unauthorized payments. In this case, Andrews and Brosius manipulated prescription drug reimbursements by promoting and filling compounded medications, which were deliberately selected because of their high reimbursement rates. Through false claims and excessive billing, they secured millions in fraudulent reimbursements from federal programs like TRICARE and commercial insurers.
Furthermore, the conspiracy charge clearly underscores their roles in a premeditated plan to defraud the health care system, with the potential punishment for this crime reaching up to 10 years in prison for each individual involved.
Conspiracy To Violate The Anti-Kickback Statute
In addition to health care fraud, Andrews and Brosius were charged with conspiracy to violate the Anti-Kickback Statute. This statute makes it illegal to offer, pay, solicit, or receive any form of remuneration in return for referrals for services covered by federal health care programs. Their kickback scheme involved paying marketers for generating prescriptions for compounded drugs, essentially buying referrals to ensure high-volume, high-reimbursement prescriptions.
This violation is punishable by up to five years in prison, alongside significant financial penalties, including fines up to $250,000 or twice the gain or loss resulting from the offense.
Andrews Plea’s Guilty
Andrews, who served as the Chief Financial Officer (CFO) of Main Avenue Pharmacy, pleaded guilty to one count of conspiracy to violate the Anti-Kickback Statute. His plea, entered in September 2024 before U.S. District Judge Madeline Cox Arleo, highlighted his involvement in the financial aspects of the scheme.
Andrews admitted to orchestrating the financial structure that paid illegal kickbacks to marketers who generated prescriptions for compounded medications. They submitted these prescriptions to federal and private insurers for reimbursement, leading to millions of dollars in fraudulent claims. By pleading guilty, Andrews acknowledged his role in the conspiracy, likely hoping for leniency during his sentencing, which is scheduled for February 18, 2025.
Brosius Plea’s Guilty
Brosius, who initially served as the Director of Business Development and later became the President of the pharmacy, pleaded guilty to two counts: conspiracy to commit health care fraud and conspiracy to violate the Anti-Kickback Statute.
Notably, his plea was entered just a day before Andrews’, in front of U.S. Magistrate Judge Michael A. Hammer. Moreover, Brosius’s guilty plea underscored his pivotal role in developing and maintaining the relationships with marketers, telemedicine companies, and doctors, all of whom played crucial parts in funneling high-reimbursement prescriptions back to Main Avenue Pharmacy. Furthermore, his admissions reflected the deliberate and calculated nature of his actions, as he actively worked to expand the scheme and maximize profits through fraudulent means.
They Both Avoid Harsher Penalties
By pleading guilty, both Andrews and Brosius avoided the uncertainty of a trial and potentially harsher sentences, but they now face the possibility of up to 15 years in prison. Their cooperation with the court and admission of guilt will likely be considered during sentencing, which may impact the final penalties they receive. Nonetheless, their guilty pleas mark the culmination of a years-long investigation into a widespread health care fraud scheme that bilked millions from federal health care programs and private insurers.
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FAQs on Main Avenue Pharmacy Fraud Case
Main Avenue Pharmacy engaged in a multimillion-dollar kickback scheme that exploited high reimbursement rates for compounded medications. The pharmacy paid kickbacks to marketers in exchange for prescriptions, which were reimbursed by federal programs like TRICARE and private insurers.
Jeffrey Andrews, the Chief Financial Officer, and Adam Brosius, the President of Main Avenue Pharmacy, were the key figures in the scheme. They orchestrated and managed the illegal kickback arrangements, targeting federal health programs for millions of dollars in fraudulent reimbursements.
The scheme targeted TRICARE and other health insurers by identifying compounded medications that would generate high reimbursements. They manipulated the system by generating unnecessary prescriptions through telemedicine companies and marketers, bilking TRICARE out of $5.8 million.
Andrews and Brosius faced charges of conspiracy to commit health care fraud and conspiracy to violate the Anti-Kickback Statute. These charges carry penalties of up to 15 years in prison and substantial fines.
Both Andrews and Brosius pleaded guilty to the charges. Andrews pleaded guilty to conspiracy to violate the Anti-Kickback Statute, while Brosius pleaded guilty to both health care fraud conspiracy and violating the Anti-Kickback Statute. Their sentencing is scheduled for February 2025.
