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Category: Daily News

La Mirada Physician Pleads Guilty to Illegal Drug Distribution

A Los Angeles-area doctor has agreed to plead guilty to a federal drug trafficking charge for illegally distributing the powerful painkiller best known by the brand names Vicodin and Norco. The DEA announced that Dr. Andrew Sun, 78, of La Mirada, will enter guilty pleas to one count of distribution of hydrocodone and one count of money laundering.  Sun, who operated medical clinics in San Gabriel and East Los Angeles, was named in an indictment that was returned by a federal grand jury about three months ago.

Sun admits that he prescribed these drugs from the early 2011 through June 2012, and did so outside the usual course of professional practice without a legitimate medical purpose.  Sun also admitted to issuing a dozen prescriptions to “patients” who were actually undercover law enforcement officers, as well as disguising over $550,000 in cash received for issuing such prescriptions. Sun also agreed to forfeit proceeds he earned from his illegal medical practice, including approximately $342,000 seized from his accounts in July 2012.

Sun could face a statutory maximum sentence of 10 years in prison for the distribution count, and 20 years for the money laundering charge.  Sun also agreed to cooperate in any action taken by the Medical Board to revoke his medical license.

The investigation into Sun was conducted by the Drug Enforcement Administration, IRS – Criminal Investigation, the California Medical Board, the California Department of Health Care Services and the Monterey Park Police Department.

Poor Outcomes Linked to Pre-Surgical Opioid Use

A new study appearing in the Journal of Bone and Joint Surgery (JBJS) links the use of opioid pain relievers to less improvement and higher levels of dissatisfaction following spine surgery.

Between 1999 and 2010, a greater focus on pain management resulted in a four-fold increase in opioids sold to hospitals, pharmacies and doctors’ offices, and a related and ongoing increase in opioid-related complications, including opioid dependence, impaired cognition and poor treatment outcomes. Previous studies have found a link between opioid use and diminished spine surgery outcomes; however, the studies did not account for differences in opioid consumption among patients.

In this study, 326 out of 583 (56 percent) patients reported some degree of opioid use prior to elective lumbar, thoracolumbar or cervical spine surgery between October 2010 and June 2012. Researchers collected preoperative demographic data on all patients including age, sex, race, diabetes and smoking status, level of surgical invasiveness, relevant comorbidities and socioeconomic information. Daily opioid use, including opioid type, dosage, route and frequency of administration in a 24-hour period, was self- reported and converted into a morphine-equivalent amount in milligrams per day. The median patient preoperative daily morphine equivalent amount was 8.75 milligrams.

Patient-reported health status was measured preoperatively, and at three and 12 months following surgery, using a range of established medical tests that measure levels of physical and mental function, depression, distress, back and other pain, disability, somatization (chronic, physical symptoms with no known cause) and treatment results. Among the findings:

1) Increased preoperative opioid use was a significant predictor of worse health outcomes at 3 and 12 months following surgical treatment, as measured in 12-Item Short-Form Health Survey (SF-12) and EuroQol-5D (EQ-5D) scores.
2) Every 10 milligram increase in the daily morphine equivalent amount taken preoperatively was associated with a decrease in mental and physical health and disability scores: a .03 decrease in the SF-12 physical and mental health summary scores, a .01 decrease in the EQ-5D score, and a .5 increase in the Oswestry Disability Index assessment.
3) Opioid consumption seems to occur frequently in those with psychiatric comorbidities such as depression and anxiety, which may lead to increased opioid use.

“We have demonstrated that increasing amounts of preoperative opioid consumption may have a harmful effect on patient reported outcomes in those undergoing spinal surgery,” said lead study author Clinton J. Devin, MD, assistant professor of orthopaedic surgery and neurosurgery at the Vanderbilt Spine Center. “Our work highlights the importance of careful preoperative counseling with patients on high doses of preoperative opioids, pointing out the potential impact on long term outcome and working toward narcotic reduction prior to undergoing surgery,” said Dr. Devin.

6th Circuit Rules Against Plaintiffs in Darvon and Darvocet Litigation

Propoxyphene is a pain reliever that was used in the United States to treat mild to moderate pain until November 2010, when drugs such as Darvon and Darvocet that contained propoxyphene were taken off the market because of the FDA’s safety concerns. The FDA action came nearly six years after the drug was banned in the U.K., and nearly a year and a half after the European drug agency banned it.

The public interest group Public Citizen had petitioned the FDA to ban the drug back in 1978 and again in 2006. Following the 2006 petition, the FDA took the matter to an expert advisory committee, which in July 2009 voted to ban the drug. However, the FDA overruled the panel, and instead asked Darvon/Darvocet maker Xanodyne Pharmaceuticals Inc. to conduct studies of the drug’s effects on the heart. The results of those studies led to the FDA finally banning the drug. “The drug puts patients at risk of abnormal or even fatal heart rhythm abnormalities,” John Jenkins, MD, director of the FDA’s office of new drugs at the Center for Drug Evaluation and Research, said when the drug was finally banned.

Teva Pharmaceuticals held the rights to generic versions of the propoxyphene products Darvocet and Darvon. To date, more than forty actions have been filed in California state courts alleging injuries related to the ingestion of propoxyphene, an ingredient found in the Darvocet and Darvon pain medications, as well as in their generic brand counterparts. There are additional propoxyphene cases pending in multidistrict litigation in the Eastern District of Kentucky. See In re Darvocet, Darvon and Propoxyphene Prods. Liab. Litig., 780 F.Supp.2d 1379 (E.D.Ky.2011

Last October, a group of attorneys responsible for many of the propoxyphene actions in California state courts filed a petition asking the California Judicial Council to establish a coordinated proceeding for all California propoxyphene actions. Soon after the request was filed, Teva removed the cases to federal court under the “mass action” provision of the Class Action Fairness Act (CAFA). CAFA provides federal courts with jurisdiction over “mass actions” if the actions meet all of the statutory requirements. CAFA defines a mass action as: “any civil action – in which monetary relief claims of 100 or more persons are proposed to be tried jointly on the ground that the plaintiffs’ claims involve common questions of law or fact.” The federal district court held that CAFA did not apply, and ordered the case back to state court. Teva appealed and a split panel of the Ninth Circuit Court of Appeals has now affirmed the district court’s decision.

Meanwhile, in the Kentucky cases, a federal appeals court on Friday upheld the dismissal of nearly all claims in 68 cases seeking to hold drug makers liable for injuries from the use of the prescription painkillers Darvon and Darvocet. The plaintiffs, who used generic versions of the drugs, had invoked design defect laws in 22 U.S. states in claiming that generic drug makers misbranded the drugs. Many also sought to hold brand-name drug makers liable for alleged misrepresentations made to prescribing doctors. A three-judge panel of the 6th U.S. Circuit Court of Appeals in Cincinnati rejected claims in 67 of the cases. One lawsuit, by a Mississippi woman who said her husband’s use of the drugs led to cardiac failure, was allowed to proceed. Friday’s decision largely upheld rulings by U.S. District Judge Danny Reeves in Lexington, Kentucky, who oversees nationwide litigation over the drug propoxyphene, including Darvon and Darvocet. Among the defendants in the various cases were Eli Lilly and Co, which won regulatory approval for Darvon in 1957 and Darvocet in 1972, and generic drug makers such as Mylan Inc and Teva Pharmaceutical Industries Ltd.

Plaintiffs suffered setbacks when the U.S. Supreme Court, in 2011 and 2013, shielded generic drug makers from state “failure-to-warn” claims and from state “design defect” claims that depended on the adequacy of a drug’s warnings.

In Friday’s decision, Circuit Judge Richard Suhrheinrich said the plaintiffs could not pursue misbranding claims against generic drug makers over propoxyphene, having failed to allege sufficient “new and scientifically significant information that was not before the FDA.” He also said misrepresentation claims against the brand-name drug makers must be dismissed because courts in the 22 states would not recognize such claims under their respective laws. The case is In re: Darvocet, Darvon, and Propoxyphene Products Liability Litigation, 6th U.S. Circuit Court of Appeals, No. 12-5368.

Jaw Dropping Vote Count For Secretary of State

State Senator Leland Yee was indicted for public corruption early this year as part of another major FBI undercover sting operation. Federal prosecutors say Yee consorted with an alleged San Francisco Chinatown gangster, Raymond “Shrimp Boy” Chow, in a scheme that involved conspiracy to traffic in firearms, money laundering, murder-for-hire, drug distribution and what the law calls defrauding citizens of honest service, or political corruption. Yee is free on bail awaiting trial. He has been suspended from the Senate. He dropped out of the race for California Secretary of State shortly after his arrest. But it was too late to take his name off the June ballot.

And the California voters did not seem to get the memo about his indictment, nor the voluntary withdrawal of his candidacy for Secretary of State.

In this month’s largely sleepy California election, there was one jaw dropping result. More than 350,000 ballots were cast for Leland Yee for secretary of state, good enough for third place, even though he dropped out. This came as a surprise to pundits as well as the other seven candidates.

The top two finishers in the June 3 primary, State Sen. Alex Padilla (D-Van Nuys) and Republican Pete Peterson, led the pack with 1,129,988 votes (30.2 percent) and 1,117,487 votes (29.8 percent) respectively, and are headed for the Nov. 4 runoff. Yee was a distant third with 354,425 votes (9.5 percent), but he finished ahead of five candidates who had actively campaigned on a clean government platform. In fourth place was independent Dan Schnur, director of the Jesse M. Unruh Institute of Politics at USC, with 347,509 votes (9.3 percent). He told KFBK Newsradio, “If you were a Californian that didn’t happen to be paying very close attention the week of the Yee arrest, the odds of you knowing about it were actually relatively slim.”

But, in San Francisco, where there was heavy coverage of the scandal – and where Yee served on the Board of Education, on the Board of Supervisors and in the State Assembly before becoming a state senator – Yee finished third with 12.2 percent of the vote, behind Padilla (41.1 percent) and Democrat Derek Cressman (14.0 percent). Asian Week pointed out that this was better than Yee’s fifth-place showing as a candidate for mayor in 2011.

In San Mateo County, part of which was represented by Yee in the Legislature, Yee was in fourth place (9.5 percent) behind Padilla (38.1 percent), Peterson (17.0 percent) and Schnur (10.2 percent).

The vote count for non-candidate Leland Yee does not stand alone in the history of jaw dropping election results from profoundly uninformed California voters.

Sherman Block (July 19, 1924 – October 29, 1998) was the 29th Sheriff of Los Angeles County, California from January 1982 until his death. He was preceded by Peter Pitchess and succeeded by Lee Baca. He died during his campaign for re-election, which he was expected to win. He still obtained about one third of the vote by voters who apparently were unaware that he was dead.

The California Worker’s Compensation system is highly politically influenced. One would hope that voters would be informed of the consequences of various political issues and strategies before selecting a candidate for office and make a wise and well informed choice. Vote counts such as the one for disgraced suspended Senator Leland Yee who had withdrawn his own candidacy should raise some question about the efficiency of the California electoral process.

Omnicare Settles Kickback Case for $124 Million

It seems like health care and kickbacks have become a tenacious business model with reports of major litigation and settlements appearing regularly in the media. Today there is yet another report.

The Wall Street Journal reports that Omnicare Inc. agreed to pay $124 million to settle allegations the nursing-home pharmacy company offered improper discounts to skilled-nursing facilities and made false billings to federal health programs, the Justice Department said Wednesday. Omnicare, is the nation’s largest provider of pharmaceuticals and pharmacy services to nursing homes.

The settlement resolves allegations that Cincinnati-based Omnicare entered below-cost contracts to supply prescription medication and other pharmaceutical drugs to skilled-nursing facilities – which were participating providers under agreements with Medicare and Medicaid – to induce them to select Omnicare as their pharmacy provider, according to the Justice Department.

The company disclosed a preliminary $120 million settlement in October and avoided a jury trial that had been scheduled on the case.

An Omnicare spokesman said Wednesday that the company agreed to settle the matter in order to avoid continued litigation, noting the settlement isn’t an admission of liability and Omnicare continues to deny that there was any wrongdoing.

In addition to the facilities’ claims for reimbursement from Medicare for short-term rehabilitation treatments, Omnicare also submitting reimbursement claims to Medicare and Medicaid for drugs the company supplied, the DOJ said.

The Justice Department said $8.24 million of the settlement will go to states that jointly funded the Medicaid programs that were affected.

The settlement also resolves allegations brought in two lawsuits filed by so-called whistleblowers under the False Claims Act, which allow private parties to file lawsuits on behalf of the government and to share in any recovery. The first whistleblower, former Omnicare employee Donald Gale, will receive $17.24 million. Mr. Gale, an Ohio pharmacist, worked for the company from 1993 until 2010.

Politics and Medical Fraud – Strange Bedfellows

An Orange County Grand Jury last week indicted 45-year-old Kareem Ahmed and 14 others, alleging he formulated topical creams and oversaw an extensive network of kickbacks that paid doctors and pharmacists more than $25 million to prescribe and distribute the products. Ahmed, president of Ontario company Landmark Medical Management, and the others face a total of 44 counts on felony charges including conspiracy, trading rebates for patient referrals, insurance fraud and involuntary manslaughter, according to two grand jury indictments.

The Los Angeles Times back story says that “with little prior history of political giving, Ahmed emerged as a major donor to Obama’s 2012 reelection campaign, giving $1 million to the pro-Obama Priorities USA Action that year, and an additional $5,000 to the president’s campaign, according to data from the Center for Responsive Politics. In addition, Ahmed made the center’s list of 100 top donors to outside spending groups, and also gave $100,000 each to the House Majority PAC and Senate Majority PAC, and thousands more to the Democratic Congressional Campaign Committee and the Los Angeles County Democratic Central Committee.”

The website, which tracks political donations, shows that Ahmed also donated $75,800 in total to the Obama Victory Fund in 2012. Other beneficiaries of Ahmed’s generosity include the Majority PAC and the House Majority PAC, which both received $100,000. Ahmed reportedly donated to a number of Democratic senators and representatives, including $5,000 to Florida Sen. Bill Nelson’s 2012 re-election campaign. In 2013, he contributed $5,200 to Pennsylvania Sen. Bob Casey’s coffers.

The Daily Caller claims that Ahmed also gave California Rep. Brad Sherman a total of $7,500 in 2012. That seemingly merited a shout of from Sherman on the House floor. On June 27, 2012, the politician hat-tipped Ahmed and another doctor in attendance who, said Sherman, “show such leadership of the Muslim community in the Los Angeles area.”

According to TPM, Ahmed claimed in a 2012 interview with the outlet that California Rep. Nancy Pelosi was his “best friend.”

The Orange County Weekly goes on with this back story. One year before that, then-Assemblyman and Assembly Insurance Committee Chairman Jose Solorio (D-Santa Ana) sponsored a bill to stop workers comp profiteering through “drug compounding,” which involves using multiple medications to create a chemical remedy specifically for one patient. It is labor intensive, costly and, according to Solorio’s legislation, devastating to California’s already bloated workers comp system. “Drug compounding–a legal but rarely necessary practice–has exploded as a physician profit-center in workers comp,” Solorio said at the time. “That practice must be stopped.”

Before Governor Jerry Brown signed Solorio’s bill into law in October 2011, the legislation withstood heavy lobbying from Ahmed’s Ontario-based company, Landmark Medical Management. The firm’s former vice president, Bruce Curnick, took credit for gathering opposition to the bill, convincing all Republicans in the State Senate to oppose it so there would not be enough votes for it to advance to the governor and helping hammer out a more industry-palatable version for Brown to sign after the Assembly-Senate negotiations. The State Bar disbarred Curnick in 2000 for misappropriating about $40,000 of client funds, disregarding the welfare of seven clients, acts of moral turpitude and 15 other violations of professional rules. Curnick reportedly mentioned to Talking Points Memo that Solorio’s bill as signed into law was essentially toothless because doctors could get around restrictions by administering the compounds themselves in their offices.

Other interesting cases are pending that raise questions about the role of political influence. Sen. Ronald S. Calderon and his brother, Tom, have been indicted on public corruption charges. The case alleges that Ronald Calderon accepted $88,000 in bribes from an undercover FBI agent and a businessman to affect legislation to extend film-industry tax credits and to change workers’ compensation laws.

It goes without saying that the top twenty pharmaceutical companies and their two trade groups, Pharmaceutical Research and Manufacturers of America (PhRMA) and Biotechnology Industry Organization, lobbied on at least 1,600 pieces of legislation between 1998 and 2004. According to the non-partisan Center for Responsive Politics, pharmaceutical companies spent $900 million on lobbying between 1998 and 2005, more than any other industry. During the same period, they donated $89.9 million to federal candidates and political parties, giving approximately three times as much to Republicans as to Democrats. According to the Center for Public Integrity, from January 2005 through June 2006 alone, the pharmaceutical industry spent approximately $182 million on Federal lobbying. The industry has 1,274 registered lobbyists in Washington D.C.

So the question is this. What does the pharmaceutical industry expect to gain in return?

Owner of Plumbing Company Faces 18 Years for Comp Fraud

Tim Shelley, 57, owner of Tim’s Plumbing was arrested yesterday on felony charges of workers’ compensation insurance fraud and grand theft. A joint investigation with the Department of Insurance and Humboldt County District Attorney’s Office uncovered Shelley’s multiple illegal business operations, alleged warranty scam and insurance fraud.

“Refusing to provide workers’compensation insurance can be devastating to employees and it is illegal,” said Insurance Commissioner Dave Jones. “California business owners should know that it is their responsibility to provide workers’ compensation insurance. We continue to find individuals that choose to disregard the law, but I am committed to working with our law enforcement partners to stop those who commit insurance fraud.”

During the course of the investigation, it was discovered that Shelley deliberately failed to obtain workers’ compensation insurance for his employees. There were instances in which employees were injured and were discouraged from claiming workers’compensation benefits. As a result, severely injured workers were unable to afford their medical costs for treatment and suffered significant financial hardships.

Further investigation revealed that Shelley was also allegedly operating a warranty replacement scam. The scam involved removing warranty tags on water heaters installed for customers and then turning in a false warranty claim, Shelley received a number of free replacement units from the manufacturer.

Shelley was arrested on June 24, 2014.The Humboldt County District Attorney’s Office will be prosecuting the case. If convicted, Shelley faces up to 18 years in state prison and $260,000 in fines.

California Launches Health Care Transparency Project

The California Department of Insurance announced an agreement with the University of California, San Francisco to provide meaningful information to consumers about healthcare prices and quality. The health care pricing and quality transparency project is funded by a federal Cycle III Rate Review Grant from the U.S. Department of Health and Human Services that was awarded to the California Department of Insurance as part of an initiative under the Affordable Care Act.

“Consumers today have limited or no access to information about the price and quality of healthcare services before they receive care. Purchasing healthcare is like shopping in a department store with a bag over your head-you have no idea what the medical costs are before you get the bill. Increased access to medical pricing and quality information is vital to help consumers make more informed decisions about their care, because the best quality care is not necessarily the most expensive care,” said Insurance Commissioner Dave Jones. “Transparency in medical pricing should improve competition and result in lower medical costs, as patients will vote with their feet if medical provider prices exceed those of competitors.”

Under the agreement with the California Department of Insurance, researchers at the Philip R. Lee Institute for Health Policy Studies at UCSF will collect and analyze data to develop price and quality information for a number of common medical procedures and episodes of care. The information will be made available online. In the initial stage of the project, UCSF’s analysis will provide average prices for geographic regions within the state using a number of data sources, including private commercial health insurance and public health programs such as Medicare.

“There are increasing calls for transparency about price and quality in California and nationally”, said Dr. Adams Dudley, Associate Director for Research at the Philip R. Lee Institute for Health Policy Studies, at UCSF. “We look forward to making more information available to California patients and their families, so they can make more informed decisions about where to get health care.”

Pursuant to the agreement with Department of Insurance, UCSF will also convene a collaborative stakeholder process with a diverse range of stakeholders, to obtain ongoing feedback regarding the project, build partnerships with interested parties, and ensure the healthcare pricing and quality project provides useful information to a number of important audiences, including consumers, businesses, health insurers and healthcare providers.

Commissioner Jones continued, “As the first price and quality transparency initiative undertaken by the State of California, we look forward to collaborating with all interested stakeholders and public agencies to make healthcare pricing and quality information available in a sustained way for all Californians.”

Study Shows Wide Differences in ASC Costs Across States

A new 23-state study from the Workers Compensation Research Institute (WCRI) shows that prices paid to ambulatory surgery centers (ASC) in some states were triple that in other states – due to state price regulation or the absence thereof.

“This study will help policymakers and system stakeholders better understand the ASC payments for common surgeries in their state, how they compare with others, and the role of different types of fee schedules,” said Dr. Bogdan Savych, author of the report and a public policy analyst with WCRI.

The study, Payments to Ambulatory Surgery Centers, examines payments for commonly used outpatient surgeries performed at ASCs in 23 large states (including California) that represent over two-thirds of the workers’ compensation benefits paid in the United States and covers surgeries in calendar year 2011.

The following are among the study’s findings:

1) In 2011, ASC payments for the same surgeries performed in higher-cost states were at least three times the payments for similar surgeries performed in lower-cost states. For example, the average ASC payment for knee arthroscopies was less than $2,000 in four study states (Pennsylvania, Michigan, Maryland, and New York) and more than $6,000 in seven study states (Indiana, New Jersey, Virginia, Missouri, Illinois, Connecticut, and Louisiana).
2) Average payments for outpatient surgeries were typically higher in states without fee schedules. For example, the average ASC payment for a common knee arthroscopy in the median state without a fee schedule ($6,272) was nearly double the median payment of the states with fixed-amount fee schedules ($3,174). Similar patterns were also found for shoulder surgeries.
3) Payments for common surgeries were more predictable in states with fixed-amount fee schedules and less predictable in states without fixed-amount fee schedules.

This study looked at actual payments for medical facility services that are associated with common surgical episodes for treating shoulder and knee injury conditions for workers with workers’ compensation claims. Surgeries examined in this analysis represent 44 percent of the ASC surgeries performed for workers with knee conditions and 52 percent of ASC surgeries performed for workers with shoulder conditions.

The study includes 23 large states covering over two-thirds of the workers’ compensation benefits paid in the United States. These states are Arizona, California, Connecticut, Florida, Georgia, Illinois, Indiana, Iowa, Louisiana, Maryland, Michigan, Minnesota, Missouri, New Jersey, New York, North Carolina, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, and Wisconsin.

Baby’s Death Allegedly Linked to Compound Drug Fraud Scheme

A specialized skin cream prescribed by a local doctor for a woman’s back and knee pain allegedly killed her 5-month-old baby after he came in contact with it, according to a Los Angeles coroner’s report. The infant’s parents are suing the mother’s doctor, whose involvement in the case also led to his being charged with involuntary manslaughter in an indictment filed last week by the Orange County Grand Jury.

According to the story on the Southern California Public Radio website, the parents of the baby, Andrew Gallegos, have filed a product liability and medical negligence lawsuit against Dr. Andrew Jarminski, physician assistant Joseph Gutierrez, Healthcare Pharmacy, Allied Medical Group and Industrial Pharmacy Management. Industrial Pharmacy Management, has a connection to another massive workers’ compensation fraud case. Industrial Pharmacy Management’s managing partner is Michael Drobot, who pleaded guilty in federal court in April to his role in a half billion dollar workers’ compensation fraud scheme.

The lawsuit claims Gallegos’ mother, Priscilla Lujan, went to Jarminski’s Long Beach office in February 2012 for treatment of injuries she suffered while working at Goodwill Industries. Medical records show Jarminski allegedly prescribed Lujan a compound transdermal cream comprised of the antidepressant amitriptyline, the pain reliever tramadol and the cough suppressant dextromethorphan.

Lujan’s attorney, Shawn McCann, claims she went home that night and applied the cream to her knee and back, as she was directed by Jarminski. After using the medication, she took care of her baby, including preparing a bottle for him and bouncing him on her knee and holding him over her shoulders, according to McCann. Lujan put the baby to sleep in her bed and awoke in the morning to find him unresponsive. He died an hour later “as a result of multiple drug intoxication,” according to the autopsy report. The report also stated that Andrew had high levels of three drugs in his system – the same drugs in the compound cream prescribed by Jarminksi. Tramadol and dextromethorphan were present at lethal levels, the coroner found. Ruling the death a homicide, the coroner’s report said the high levels of drugs in the baby’s blood could not result from incidental skin absorption or passive transfer, and instead suggested the baby ingested the medication. Medication residue was found on one of the baby’s bottles, the coroner reported.

Lawyers for Jarminski, Gutierrez, Healthcare Pharmacy, Allied Medical Group and Industrial Pharmacy Management did not return calls from KPCC seeking comment.

Lujan was arrested after her son’s death, but the Los Angeles District Attorney declined to file charges because of insufficient evidence, according to spokeswoman Jane Robison. The lawsuit suggests the compound cream should not have left Jarminski’s office because its label said it was only to be applied in a medical office under a doctor’s direction. There were other problems with the label, McCann said. “It wasn’t properly labeled with [Lujan’s] name, what the prescription was for, or how to use it,” he said.

The cream Jarminski prescribed for Lujan was costly. Workers’ compensation records show Jarminski’s office billed $1,700 for the initial 25-day supply of the cream. Jarminski was informed the cream was linked to Lujan’s son’s death but, according to McCann, that didn’t stop the doctor from sending more creams. “Priscilla had expressed she didn’t want to see that cream anymore or use it anymore,” McCann said. “Despite that they continued to send her more creams by mail and bill workers’ comp for it.” McCann said at least two to four more tubes of cream were sent to Lujan after her son’s death. It’s unclear how much Jarminski billed in workers’ compensation claims for those additional tubes.

The prescription, production and distribution of compound transdermal creams are at the center of the sealed indictment delivered last week by the Orange County Grand Jury. Fifteen people were indicted for their roles in the alleged scheme, which purportedly involved more than $25 million in kickbacks paid to physicians who prescribed the creams. Jarminski was among those indicted by the grand jury, as was Michael Rudolph, the owner of Healthcare Pharmacy, which is named in Lujan’s lawsuit. Healthcare Pharmacy’s name is on the label of Lujan’s prescription as the preparer of the compound cream. Rudolph was indicted along with Jarminski for fraud and involuntary manslaughter, as was the scheme’s alleged mastermind, Kareem Ahmed. Jarminski is associated with Allied Medical Group (another firm named in Lujan’s suit), as is Dr. Daniel Capen, who was also indicted by the grand jury on fraud charges.