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Lodi oncologist, wife pay $300,000 to settle chemo drug claim

Oncologist Dr. John F. Kiraly III and his wife, Rene Kiraly, purchased the drugs from Warwick Healthcare Solutions Inc., also known as Richards Pharma, a former United Kingdom-based firm that distributed throughout the United States drugs not approved by the FDA, according to the prosecutors.
Oncologist Dr. John F. Kiraly III and his wife, Rene Kiraly, purchased the drugs from Warwick Healthcare Solutions Inc., also known as Richards Pharma, a former United Kingdom-based firm that distributed throughout the United States drugs not approved by the FDA, according to the prosecutors. The Associated Press

A Lodi oncologist and his wife, who was his office administrator, have paid the United States $300,000 to settle allegations that they billed Medicare for chemotherapy drugs purchased from an unlicensed foreign distributor, acting U.S. Attorney Phillip Talbert announced Monday.

Federal prosecutors allege that, between October 2010 and May 2011, Dr. John F. Kiraly III and Rene Kiraly billed and received reimbursement from Medicare, the government-funded health care insurance for seniors, for the drugs in violation of the False Claims Act.

One medication purchased by the couple was Altuzan, which is not approved by the U.S. Food and Drug Administration. The agency tested a batch of Altuzan the Kiralys acquired and determined that it was “counterfeit,” lacking the active ingredient bevacizumab, prosecutors claim. They said the drug was administered by Dr. Kiraly to his patients. Bevacizumab interferes with the growth and spread of cancer cells.

There was no explanation from the U.S. attorney’s office as to why a criminal case is not being pursued against the Kiralys.

The couple purchased the drugs from Warwick Healthcare Solutions Inc., also known as Richards Pharma, a former United Kingdom-based firm that distributed throughout the United States drugs not approved by the FDA, according to the prosecutors.

Talbert said federal authorities in the Sacramento-based Eastern District of California have “pursued and resolved False Claims Act allegations against three doctors for improperly billing Warwick drugs to public insurers.”

Two other San Joaquin County physicians – Dr. Neelesh Bangalore and Dr. Prabhjit Purewal – settled similar allegations by prosecutors last year with payments to the United States of $736,000 and $550,000, respectively.

Steven Ryan, special agent in charge of the Office of Inspector General of the U.S. Department of Health and Human Services, said Monday, “Patients getting life-saving prescriptions from their doctors must be able to trust that their medicines have been FDA-proven as safe and effective.”

Sheila Sexton, the office manager at Stockton Hematology Oncology Medical Group, said Kiraly has closed his practice and is now an “independent contractor” with the Stockton group.

Kiraly’s Stockton attorney, Al Ellis, said, “There was no admission of liability” on the part of his client. “It was a disputed claim that Dr. Kiraly chose to settle for a number of reasons.”

Ellis also noted that there has been no action taken against Kiraly by the California Medical Board.

Board spokeswoman Susan Wolbarst said the board “is looking into this case.”

Denny Walsh: 916-321-1189

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