Pharma giant accuses Rockland’s Medwiz Solutions of taking $1.9M in drug refund fraud
Strengthening a Landlord’s Position
By Jeffrey Citron & Robert L. Rattet
The COVID-19 lockdowns have imposed enormous burdens on property owners, with many commercial tenants operating on a limited basis after months of closures. As a result of businesses closing or restricting operations and government-imposed eviction moratoriums many landlords have been unable to collect the full amount of rent due – even as landlords are still required by law to make mortgage and property tax payments and maintain their properties. Yet there are signs of hope for commercial property owners in Westchester, Rockland, and Fairfield counties, with companies and workers reevaluating the need to stay in Manhattan or perhaps reducing their presence in the city. Many have already packed their bags, with a recent Bloomberg report estimating as many as 200,000 people – primarily young, affluent families – could depart for the suburbs this year alone. As companies shift to more flexible schedules – allowing employees to work remotely or come to the office only a few days each week – the need for a large headquarters in a specific location diminishes. Suburban commercial centers such as White Plains, Haverstraw, and Stamford offer exceptional values within the region, and larger spaces that could accommodate social distancing precautions. At the same time, many families that had never before thought of leaving the city are coming to understand the appeal of suburban life, with abundant recreation, safe streets, and excellent public schools.
Looking toward 2021, there are opportunities for property owners in Westchester, Fairfield and the surrounding counties to create attractive, modern office spaces, housing, and other amenities to draw city-dwellers – and their employers – into the suburbs. An experienced team of attorneys and government relations experts offers key support for owners and property developers seeking to expand their existing footprints and accommodate companies looking to make a move. When navigating local zoning and land use regulations and forming partnerships with others to invest in building vibrant communities, these skilled professionals are vital. Jeffrey Citron is co-managing partner of Davidoff Hutcher & Citron LLP. He has extensive experience assisting companies to secure financing, grants and other benefits for capital projects and serves as general counsel for prominent businesses. Reach him at CIT@DHCLegal.com Robert L. Rattet, a Partner at DHC, co-chairs the firm's Bankruptcy, Restructuring, and Creditors Rights practice group. Reach him at RLR@DHCLegal.com
New York City ▪ Washington D.C. ▪ White Plains ▪ Albany 212.557.7200 ▪ DHCLegal.com
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SEPTEMBER 28, 2020
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BY BILL HELTZEL bheltzel@westfairinc.com
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Rockland pharmacy allegedly tricked drugmaker Sandoz Inc. into paying nearly $1.9 million in phony refunds for expired drugs, according to a lawsuit. Sandoz Inc. accused Medwiz Solutions LLC of Bardonia of racketeering in U.S. District Court in White Plains. “We vehemently deny the allegations and claims,” Medwiz CEO Eric Newhouse said in a brief telephone interview. “We look forward to presenting our defenses in this case and we are confident we will be successful.” Sandoz, a subsidiary of the Swiss pharmaceutical company Novartis, makes and sells generic drugs and other products. It is based in Princeton, New Jersey. Medwiz is a family-owned pharmacy that serves assisted living and long-term care facilities in the Northeast and Kentucky. It is based in Bardonia and has a retail store in Spring Valley. Sandoz claims that Medwiz exploited its procedures for claiming refunds for expired drugs from 2015 to 2017. The drug-maker allows customers who buy from authorized wholesalers to return drugs for a refund within six months of the expiration date and up to a year after expiration. But periodically, Sandoz sells “short-dated” drugs that are within a year of their expiration date, at significantly discounted prices, to customers who are not authorized wholesalers. Such sales are considered final, are not eligible for refunds and may not be returned for credit. Returned drugs must include a debit memo that names the authorized wholesaler and provides details about the products. Sandoz relies
on the memos to determine whether the returns are eligible for credit. Medwiz bought discounted drugs, knowing that they were nonrefundable, Sandoz claims, and then quickly returned them. The memos allegedly represented that the drugs were bought from authorized wholesalers. Sandoz said it discovered the scheme when it became “suspicious of defendants’ increasingly larger volume of returns.” Medwiz never intended to sell or distribute the drugs, the complaint states. Instead, the pharmacy returned thousands of units of hundreds of Sandoz products, submitted 78 debit memos “and reaped a windfall of $1,880,533.” Medwiz, for example, identified Kinray Inc. as the authorized servicing wholesaler and McKesson Pharmaceutical as the primary wholesaler, the complaint states, “knowing that they had not purchased such products from Kinray or McKesson.” The debit memos identified “Blanche Reiss” and “Batya Gorelick” as the Medwiz contacts. Reiss, the clinical director, and Batya Gorelick, former vice president of administrative services, are named as defendants in the lawsuit. Newhouse said they should not have been named because their duties were clerical. Gorelick has since left the company. He depicted the lawsuit as “an attempt to claw back money.” “I don’t want to get into the merits,” he said, “but we’re very confident we will be successful.” In addition to racketeering, Sandoz accused the defendants of fraud, interstate transportation of stolen money, misrepresentation and unjust enrichment. Sandoz is represented by Princeton attorney Linda Wong.