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Pharmacy that was state’s largest recipient of opioids to pay $11 million in settlement

Massachusetts Attorney General Maura Healey.
Massachusetts Attorney General Maura Healey.John Tlumacki/Globe Staff

A mail-order pharmacy in Andover, the largest recipient of opioid pills in Massachusetts between 2006 and 2012, will be ordered to pay the state $11 million to settle allegations that it improperly dispensed medication, Massachusetts Attorney General Maura Healey announced Thursday.

Attorneys with Healey’s office accused The Injured Workers Pharmacy, which serves workers compensation patients, of shipping thousands of opioid pills across the country without proper safeguards.

“IWP did not stop dispensing their prescriptions until long after their suspicious prescribing behaviors were or should have been apparent to the pharmacy staff filling them and sales staff visiting their offices,” attorneys for Healey’s office wrote in a complaint.

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A spokeswoman for the pharmacy said new leadership came in 2017 and significantly changed how the company operated, including eliminating a program the attorney general’s office later targeted in its investigation.

“Since 2017, when new leadership took responsibility for many senior roles in the organization, IWP undertook a comprehensive review and update of many of its training, policies, controls, compliance, and oversight programs,” said Diana Pisciotta, a spokeswoman for the pharmacy. “In hindsight we recognize that the model was imperfect and suspended it completely long before the Attorney General launched her review. We regret the program.”

Now, Pisciotta said, C-2 prescriptions like opioids make up about 15 percent of the company’s business.

Healey said the pharmacy “put dispensing speed and volume over patient and public safety.”

“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 statement.

“IWP did not utilize its sales representatives to identify and report red flags about the doctors they were visiting; it did not train, require or incent its sales representatives to identify or report red flags regarding the prescribers they visited. Rather, it paid them largely on the basis of ’new patient ships’ — the ‘key driver of [IWP’s] continued financial success and growth’ – and it armed them with large expense accounts to woo referral sources.”

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Injured Workers Pharmacy does not have to admit to any wrongdoing under the agreement. It will have to hire a chief compliance officer, a data analyst to identify suspicious prescribers and at-risk patients, a pain management specialty pharmacist, and an independent auditor to conduct a one-year compliance study.

Attorneys with Healey’s office described the pharmacy’s compensation structure for its sales team as lacking oversight, with “predictable results,” according to the complaint. Sales representatives who wanted to meet quotas and earn bonuses were accused of pressuring other staff members to process prescriptions fast, without properly checking for suspicious behavior from prescribers or whether the drugs were medically necessary for patients, records show.

The pharmacy also had referral payment agreements with a personal injury law firm not named in the complaint, records show. The pharmacy agreed to pay the law firm $4,000 a month, purportedly to drive traffic to the pharmacy’s website — but communications between employees showed the payment was actually for the law firm to funnel 40 cases to the pharmacy every month, records show.

In all, Injured Workers Pharmacy paid the law firm more than $90,000 between 2017 and 2019 for hundreds of patient referrals that generated more than $1.2 million revenue for IWP, records show.

Pisciotta said the sales and marketing efforts were meant to educate doctors and attorneys about the medication needs of workers compensation patients.

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“Sales and marketing staff did not advocate for specific drugs and were not compensated based on type of drugs prescribed. All formal law-firm specific marketing agreements were suspended in 2017; to the extent that an informal agreement with a law firm continued after that date, it was not authorized and the employee responsible was involuntarily terminated in early 2019. At no time has IWP compensated physicians for referrals,” Pisciotta said.

Felice J. Freyer of the Globe staff contributed to this report.



Gal Tziperman Lotan can be reached at gal.lotan@globe.com or at 617-929-2043.