May 11, 2022

Amazon subsidiary pays over $5.6 million to resolve False Claims Act allegations

On May 6, 2022, the US District Court for the Southern District of New York endorsed a stipulation of settlement between the United States, 31 states and territories, and two individual relators as plaintiffs, and, Inc. and Amazon Pillpack as defendants, to resolve allegations under the False Claims Act.

The case was brought by two individuals who filed a complaint under the qui tam provisions of the FCA in July 2019.  The relators claimed that Pillpack, an online retail pharmacy that is wholly owned by Amazon, submitted to Medicare, Medicaid and other government healthcare programs requests for reimbursement for insulin pens that falsely under-reported the number of days the insulin pens would last for each patient. The government intervened in the qui tam action on April 21, 2022.

The facts, as admitted, reveal that by inputting inaccurate data about the days of supply received by patients, Pillpack used its automated prescription management and dispensing software to generate premature refill dates; this caused pharmacists to dispense insulin pen refills days or weeks before patients actually needed them, and this in turn caused government health programs and associated payers to approve—incorrectly and prematurely—Pillpack’s claims for reimbursement.

The settlement requires the payment of $5,616,136.85 by the defendants; of this amount, $2,808,068.43 constitutes restitution to the United States.  Amazon and Stillpack will be required to cooperate in the investigation of individuals and entities not released in the stipulation, and to facilitate and encourage the cooperation of the companies’ officers and directors, whom the stipulation also does not release from liability.

Stipulation and Order