La Jolla Oncologist Pleads Guilty to Cancer Drug Scheme

Dr. Joel I. Bernstein, 59, is accused of buying and administering foreign cancer drugs not approved for use in the United States

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    A La Jolla oncologist and his medical practice have pleaded guilty in a scheme to import and dispense unapproved, foreign cancer drugs to unwitting patients, U.S. Attorney Laura E. Duffy’s office announced Wednesday.

    According to investigators, defendant Dr. Joel I. Bernstein, 59, imported unapproved cancer drugs at a deep discount and distributed them to patients. He would then bill Medicare as if the drugs were legitimate and pocket the profits.

    His patients were unaware of his scheme, investigators said.

    At a hearing on Jan. 15, Bernstein pleaded guilty to a single count of introducing a cancer drug called “Mabthera” into interstate commerce and administering it to patients. The drug is not approved in the U.S. and was intended for a market in Turkey.

    Investigators say the approved U.S. drug with the same active ingredient is Rituxan., used to treat lymphomas and leukemias.

    In addition, Bernstein’s medical practice, Dr. Joel I. Bernstein, M.D., Inc., also pleaded guilty at a hearing Wednesday on one count of health care fraud.

    From 2007 to 2011, investigators say the practice bought $3.4 million in foreign cancer drugs not approved by the U.S. Food and Drug Administration.

    The office purchased the drugs for much less than market value in the U.S. and then submitted claims to Medicare at the full reimbursement price. To keep the scheme going, the office fraudulently used Medicare reimbursement codes for approved cancer drugs, since Medicare doesn’t pay for unapproved drugs.

    Employees at the medical practice admitted they were aware that the drugs were not approved by the FDA because in October 2008 the FDA sent the office a warning notice. The note said a shipment of drugs en route to the medical practice had been detained because the drugs were not approved for use in the U.S. by the FDA.

    Still, despite the warning, Bernstein’s practice continued to purchase and administer foreign drugs.

    The plea agreement for the medical practice calls for $1.7 million in restitution to Medicare, plus a forfeiture of $1.2 million in profits. The medical practice will be sentenced on May 17.

    The government has also filed a False Claims Act lawsuit in District Court against Bernstein and his corporate medical practice for submitting false claims to Medicare.

    According to the FDA, Bernstein’s case is the latest in a growing, nationwide trend to expose unwitting patients to foreign drugs – especially cancer drugs -- not vetted by the FDA.

    The FDA’s Office of Criminal Investigations currently has more than 200 investigations involving similar schemes orchestrated by medical practices for personal financial gain.

    In most cases, FDA officials say these unapproved oncology drugs are infused into patients without the patients ever seeing the box the drug came in. This makes it easy for medical practices to cover up any wrongdoing.

    “This isn’t just about the greed of one doctor, but about the welfare of many patients,” said U.S. Attorney Laura Duffy. “In a worst-case scenario, chemotherapy drugs that have not been approved by the FDA may be fake, ineffective, unsafe and dangerous.”

    In Bernstein’s case, the drugs he administered to patients were not counterfeit and did contain the appropriate level of active ingredients. They were, however, still unapproved for use in the United States.

    Investigators say there is no evidence to indicate that any of Bernstein’s patients were harmed by the foreign drugs.

    Bernstein's sentencing is scheduled for Apr. 16. He faces one year in prison, a $100,000 fine, one year of supervised release and restitution. His medical practice faces five years of supervised release, a $500,000 fine and mandatory restitution.

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