Eli Lilly, one of the world’s largest pharmaceutical makers, has won a federal court order against leaders of a Tennessee church and Florida and Tennessee-based pharm
acy groups, after the drugmaker said the participants had crafted a years-long scheme that bilked Lilly of some $200 million in rebates for its popular weight-loss drug.
“Through extensive pre-litigation investigation, Lilly has identified a network of interconnected individuals and entities who, since at least 2020, have been explo
iting Lilly’s practice of paying rebates to PBMs (pharmacy benefit managers) to systematically defraud Lilly,” reads the pharmaceutical firm’s argument for a temporary restraining order on the organizations.
U.S. District Judge Federico Moreno, in Miami federal court, granted the order on Tuesday, barring the church leaders, mail-order pharmacies, PBMs and healt
h organizations from submitting any more rebate claims to Lilly; from destroying records and computer files; and from assisting others in those actions.
One member of the network, Misha Maynard, of Nashville, was separately ordered to quickly turn over names of all pharmacies, wholesalers, that the network has had an interest in, along with other information, the judge’s order reads.
Maynard’s brother, Jerry Maynard Jr., was also named as a defendant in Lilly’s legal action. He is a former Nashville Metro city councilman and is a leader of a Church o
f God in Christ-denomination church in Tennessee, according to news reports. The church was not named in the federal lawsuit, but other leaders, including bishops, were.
The scheme worked like this, Lilly said in court filings: Lilly is the maker of Trulicity, an extremely popular, glucagon-like peptide-1 agonist, or GLP-1 medication, used to treat diabetes and obesity. Due to the high cost of the drug, Lilly has provided rebates to PBMs.
Enter the defendants, DrugPlace Inc., with operations in Florida and Tennessee, and Community Health Initiative. Lilly has argued that DrugPlace has acted as a ph
armacy and PBM for Community Health, which claims to provide a prescription cost-sharing program for uninsured members of the Church of God in Christ, explains Lilly’s filing in support of the restraining order.
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“Under these pretenses, DrugPlace and its associates and affiliates have submitted (through intermediaries) hundreds of thousands of false rebate claims for Trulicity and defrauded Lilly out of more than $200 million,” Lilly said.
DrugPlace, in its capacity as a pharmacy, purports to dispense tens of thousands of prescriptions of Trulicity for Church members in the Community Health prescription cost share program each year, Lilly’s attorneys argued. “But most or all of those prescriptions and patients do not exist. The purported ‘cost share program’ is simply a front for fraud.”
DrugPlace and its affiliated organizations would purchase Trulicity from authorized distributors, then resell the medicine to other drug distributors or retail pharmacies on the secondary market, Lilly claimed in court.
“Indeed, Lilly has caught Defendants red-handed reselling its medicine to secondary drug distributors. DrugPlace, which is not licensed as a pharmaceutical wholesaler, obscures its role in the resale process by omitting itself in the chain-of-custody pedigree documents showing the medicine’s movement through the supply chain,” the pharma giant said.
