DOJ and Commonwealth of Virginia to Investigate Potential Hoarding of Coronavirus Medications and Other Essential Medical Supplies

Unfortunately, the current pandemic state has given rise to various forms of hoarding of certain medications and other essential medical supplies. As reports about potential stockpiling of hydroxychloroquine and chloroquine by physicians began to surface, the Department of Justice announced that it would be investigating instances of this type of activity.

In late March, US Attorneys in Ohio issued a public statement indicating their commitment to address situations where physicians who are prescribing anti-viral medications such as hydroxychloroquine to healthy friends or associates because there is some anecdotal evidence the drugs could treat the novel coronavirus.

All US Attorneys’ Offices have been directed to designate lead prosecutors in their offices to handle COVID-19 related hoarding and price gouging cases that are expected to be brought.

Meanwhile, pharmacists have expressed concerns about potential shortages of drugs including chloroquine and hydroxychloroquine. They have noted increased volume of prescriptions of these medications, which could result in shortages of these medications to treat conditions for which they are typically prescribed, such as lupus, malaria, and rheumatoid arthritis, and if needed to treat patients who have confirmed diagnoses of COVID-19.

The Department of Health and Human Services and other regulatory agencies have received reports of physicians attempting to hoard these drugs or to write prescriptions to family members and friends who do not currently have a need for these medications. Some of the indicators that have raised concerns are instances of prescriptions of unusually high numbers of pills or prescriptions being called in for out-of-state patients. In some states, pharmacy boards have begun to impose restrictions on the prescription and distribution of these medications in an attempt to prevent shortages of these medications.

The focus of law enforcement appears to be on ensuring that these medications are being prescribed and used appropriately. This means that investigators will likely be reviewing prescription data for cases where physicians may have given a false diagnosis or included false information to cause a prescription to be dispensed.

In Virginia, a Coronavirus Fraud Task Force has been created to address these issues which are arising during the current pandemic. This task force is spearheaded by the US Attorneys in the Western and Eastern Districts of Virginia. The Virginia Health Commissioner Dr. Norman Oliver, in response to increased demand for potential treatments for COVID-19 for drugs, reminded physicians and pharmacists by letter on March 25, 2020 that these medications should only be dispensed under specified limited circumstances based on legitimate medical need. Dr. Oliver, in consultation with the Virginia Department of Health Professions, the governing body for physicians and pharmacists practicing in the Commonwealth, also cautioned against improper dispensing and potential hoarding of these medications.

The U.S. Attorney’s Offices for the Eastern and Western Districts of Virginia issued a statement confirming that federal prosecutors are aware of Dr. Oliver’s warnings regarding this increased demand and potentially improper behavior by physicians and other health-care providers who may be improperly prescribing these drugs to themselves, their families, and others without a legitimate medical purpose. They confirmed that their offices, as part of a joint COVID-19 Fraud Task Force, will be closely monitoring this situation and are prepared to investigate and prosecute potential violations of federal and state law committed by any individuals or entities, including physicians, dentists, and other healthcare providers, related to these prescription drugs.

• March 27, 2020 press release from the USAO for the WDVA

This Virginia COVID-19 Task Force has sent letters to the CEOs of all major hospital systems in the state, alerting them to the potential for fraudulent or illegal activity associated with the pandemic. Hospital leadership was specifically informed about the potential criminal consequences that could arise from hoarding of certain medical supplies, including those identified as scarce in the March 23, 2020 Executive Order signed by President Trump. Among the medical supplies designated as scarce are N-95 masks, portable ventilators, chloroquine and hydroxychloroquine, and a variety of other protective equipment utilized by medical personnel. The letters went a step further, requesting that hospital administrators identify individuals or entities who may have acquired medical supplies in quantities beyond what they would reasonably use or for the purpose of charging exorbitant prices for these items.

• April 10, 2020 press release from the USAO for the WDVA

The Virginia Secretary of Public Safety and Homeland Security has echoed a similar focus on the state level, stating that Governor Northam and his administration will not tolerate any fraudulent activity taking place in Virginia related to the pandemic.

Providers should be mindful of the increased focus on prescription activity of these medications. Prescriptions that raise concerns or do not appear to be for a legitimate medical purpose may result in a criminal investigation or potential criminal charges. Providers should also be aware that these type of allegations often result in complaints to the Virginia Board of Medicine and other specialty boards which can lead to investigations and potential disciplinary action against the providers’ license such as suspension or revocation.

If you have concerns about prescription activity or any of these related issues of hoarding or price gouging, please contact our Criminal and Government Investigations team for more information. If you have been notified of a Board of Medicine or other specialty board investigation or have questions about licensure implications, please contact our Board of Medicine and Healthcare Professions team.

See also: When it comes to COVID-19 criminal implications, prosecutors are casting a wide net