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Kentucky Clinic Charged with Selling Improper Chemo Drugs, False Medicare Claims

Charged with false claims to Medicare program for misbranded, unapproved chemotherapy drugs; drugs came from Turkey and India through Canada

June 26, 2014 – The FDA’s Office of Criminal Investigations announced today that an oncology center in Kentucky has pleaded guilty to selling unapproved and improperly labeled chemotherapy drugs. The charges included submitting false claims to the Medicare program for misbranded, unapproved chemotherapy drugs administered through the clinic. The successful investigation also serves as a warning to seniors – the most frequent patients at oncology centers – to investigate carefully before choosing healthcare providers.

The Hematology and Oncology Center (HOC) PLLC of Somerset, Kentucky has pleaded guilty to the federal charges brought by the U.S. Attorney’s Office for the Eastern District of Kentucky.. HOC’s former office manager, Natarajan Murugesan, also pleaded guilty to assisting with these activities, which are violations of the Federal Food, Drug, and Cosmetic Act.


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Agents from the FDA’s Office of Criminal Investigations led this investigation with assistance from the U.S. Department of Health and Human Services’ Office of Inspector General.

The criminal charges relate to a civil settlement agreed to in January 2014 by HOC, Murugesan, and N Mullai, M.D.  Dr. Mullai was not charged criminally. Under the earlier civil settlement, HOC, Murugesan, and Mullai agreed to pay $2,000,000, plus interest, to resolve charges that they violated the False Claims Act

HOC obtained substantial amounts of chemotherapy drugs and other cancer treatment drugs from a foreign drug distributor in Canada operating under the name Quality Specialty Products (QSP).

These drugs were obtained from Turkey, India, the European Union, and other international locations. Often, the drugs arrived at HOC with labels and dosage instructions in foreign languages. In 2012, the FDA sent letters to medical practices, including HOC alerting them that the cancer medicines they purchased from QSP were unapproved and potentially counterfeit.

“The FDA commends the U.S. Attorney’s Office, Eastern District of Kentucky, for pursuing these allegations and for helping protect U.S. consumers from potentially receiving counterfeit, ineffective, or contaminated medicines,” said Philip Walsky, acting director of the FDA’s Office of Criminal Investigations.

“The FDA is committed to ensuring that consumers have access to high-quality drugs that are safe and effective."

Related U.S. Department of Justice cases:

   • Feb. 21, 2014: Alvarado Pharmacy and owner ordered to repay Medicare over $1 million

   • Dec. 20, 2013: Local doctor pleads guilty in misbranding drugs case

   • July 12, 2013: Paul Daniel Bottomley sentenced in U.S. District Court

   • June 11, 2013: Johnson City physician sentenced for unapproved foreign drugs

The FDA, an agency within the U.S. Department of Health and Human Services, protects the public health by assuring the safety, effectiveness, and security of human and veterinary drugs, vaccines and other biological products for human use, and medical devices. The agency also is responsible for regulating our nation’s food, cosmetics, dietary supplements, products that give off electronic radiation, and tobacco products.

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