Injured Workers Pharmacy Paying $11M to Settle Complaint

June 30, 2020

A mail-order pharmacy that fought frequent court battles against workers’ compensation insurers will pay $11 million and change its business practices to settle a civil complaint by the Massachusetts attorney general’s office.

Injured Workers Pharmacy, or IWP, improperly dispensed opioids to injured workers after paying attorneys for referrals and contracting with physicians who prescribed drugs to known abusers, the office said. The company did not properly review prescriptions to ensure they were legitimate and engaged in unlawful marketing practices to boost sales, the complaint says.

“They dispensed thousands of prescriptions for dangerous drugs, including opioids like fentanyl, with a shocking lack of regard for whether those prescriptions were legitimate,” Healey said in a press release. “Combatting the opioid epidemic remains a top priority of my office and we will aggressively pursue those who break our laws to profit from this crisis.”

IWP is a familiar name to workers’ compensation insurance adjusters because it dispenses medications even for claims that have not been accepted as compensable, complicating settlement negotiations. The company, founded in 2001, has filed lawsuits against CompSource Mutual Insurance Co. and New York City seeking reimbursement for alleged “underpayments” for the drugs it delivered to workers’ compensation claimants.

The complaint by Healey’s office says that IWP used unlawful tactics to drive sales, including entering into illegal agreements to buy patient referrals and offering incentives to sales staff to engage in their own misconduct and ignore red flags by paying them based on dispensing volume.

The complaint alleges IWP filled and shipped:

IWP entered into a consent judgment that requires it to hire additional staff and change its operations and business practices. Among the required measures, IWP must:

IWP did not admit to any wrongdoing when it agreed to the consent judgment. The company announced on its website the launch of a new compliance program following the attorney general’s “recent review” of its business practices.

“We will continue to assess and evolve our practices in the best interest of our patients and in compliance with state and federal regulations,” the company said.