Pharmaceutical Sales Rep Sentenced For Defrauding Insurance Companies Out Of Millions Of Dollars

BUFFALO, N.Y.-U.S. Attorney James P. Kennedy, Jr. announced today that Scott Trapp, 50, of Clarence, NY, who was convicted of conspiracy to commit health care fraud, was sentenced to serve 36 months in prison by U.S. District Judge Lawrence J. Vilardo. The defendant was also ordered to pay approximately $10,000,000 in restitution.

Assistant U.S. Attorney Maura K. O’Donnell, who handled the case, stated that in 1996 the defendant began working as a pharmaceutical sales representative for various pharmaceutical companies. In 2014, Trapp began marketing “compounded medications,” such as pain patches, pain creams, and scar creams. “Compounded medications” are medications created when a licensed pharmacist, a licensed physician, or a person working under the supervision of a licensed pharmacist, combines, mixes, or alters ingredients of a drug to create a medication tailored to the needs of an individual patient.

The compounded medications marketed by the defendant, and his associates, were not tailored to the needs of individual patients. Instead, the medications were tailored to contain ingredients that carried high reimbursement rates from health insurers. Formulations of the medications were modified at times to permit reimbursement from health insurance companies and/or to maximize reimbursement rates. For example, a one month supply of one of the compounded pain creams marketed by Trapp carried a reimbursement rate of $22,000.

Unlike typical pharmaceutical sales representatives who market prescription drugs to physicians, the defendant, and his associates, identified patients whose health insurance covered the medications, and convinced the patients to agree to receive the medications.

Read more: https://www.justice.gov/usao-wdny/pr/pharmaceutical-sales-rep-sentenced-defrauding-insurance-companies-out-millions-dollars