BTW Solutions: Physician-Dispensed Pain Creams and Kickbacks

In the BTW Solutions pain cream OWCP settlement, the drug wholesaler agreed to pay $1.5 million to the United States over allegations that it shared marked-up federal reimbursements with physicians. The government alleged that doctors could buy the creams at or near cost, then share in the much larger payment billed to the federal workers’ compensation program. The alleged sales incentive was the money left after the cream was paid for.

BTW Solutions LLC was an Arkansas-based drug wholesaler providing drugs and billing services to physicians treating workers’ compensation patients. The Justice Department announced the civil settlement on December 23, 2024. This pharmaceutical fraud case concerned both sides of that business: supplying the product and submitting the bill that paid for it.

How Do Pharmaceutical Kickbacks Work?

Pharmaceutical kickbacks give a buyer a financial reason to choose a drug reimbursed by a federal healthcare program. In BTW’s case, the government alleged that the inducement combined a low purchase price with a share of the reimbursement. The physician’s return depended on what the government paid.

The government alleged that from 2013 to 2018, BTW offered pain creams to physicians at or near cost, billed the Department of Labor’s Office of Workers’ Compensation Programs on their behalf at an exorbitant markup, and split the reimbursement with them.

The Anti-Kickback Statute prohibits offering money or anything of value to induce purchases reimbursed by a federal health care program. The kickback allegation against BTW followed that purchase incentive into the resulting OWCP claims. The government alleged that those claims violated the False Claims Act because they resulted from the kickback arrangement.

OWCP Paid the Claims for Injured Federal Workers

The Department of Labor’s Office of Workers’ Compensation Programs pays workers’ compensation claims submitted on behalf of injured federal workers. In the BTW case, the federal program paid bills for physician-dispensed pain creams.

The money was meant to pay for injured federal workers’ care. According to the government’s allegations, part of it instead became the financial incentive for physicians to buy BTW’s creams. The program was paying for the product and funding the inducement to choose it.

The Spread Between the Purchase and the Payment

The spread is the difference between what a customer pays for a drug and what that customer receives when the drug is billed to a patient or payer. The Health and Human Services Inspector General’s 2003 guidance for pharmaceutical manufacturers explains why controlling that difference can mean controlling the customer’s profit.

The guidance describes marketing the spread through sales pitches that promote reimbursement profit as a reason to buy a product. It also addresses purposeful manipulation of average wholesale price to increase what federal programs reimburse. The commercial attraction is the return the customer can make after buying the drug.

The guidance distinguishes a discount funded by the seller from a manipulated reimbursement benchmark funded by the government. In the latter arrangement, the supplier can promise the customer a larger return while sending the extra cost to the public payer.

Average wholesale price also appears in the Department of Labor’s pharmacy fee schedule. Its September 2015 schedule calculated maximum drug payments using a percentage of that benchmark plus a dispensing fee.

The Whistleblower Case and the Civil Settlement

A whistleblower started the BTW case under the False Claims Act. The government later joined it, and the civil settlement resolved allegations about the pain-cream bills and the payments behind them.

The whistleblower’s role matters because the alleged arrangement crossed the sales and billing sides of the business. Someone who understands the offer to physicians can explain a payment pattern that claim totals alone leave unexplained. Our work with pharmaceutical whistleblowers connects that knowledge to the transactions behind the government’s payments.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

Compounding Ingredient Cases Show Another Use of the Spread

Separate cases against ingredient suppliers show how a reimbursement benchmark itself can become part of the sales pitch. These compounding ingredient pricing allegations concern suppliers selling ingredients to pharmacies and promoting the profit available when those pharmacies bill federal programs.

Fagron Holding USA agreed to pay $22.05 million in a compound ingredient settlement. The government alleged that its subsidiary Freedom Pharmaceuticals reported an average wholesale price of $3,500 per gram for fluticasone propionate while typically selling it for about $160 per gram. It allegedly marketed the reimbursement spread to compounding pharmacies. The affected programs included TRICARE and the federal workers’ compensation program.

Medisca agreed to pay $21.75 million in a compound ingredient settlement. The government alleged that it sold resveratrol for under $2 per gram while reporting an average wholesale price of $777 per gram. The alleged ingredient-pricing scheme also reached prescriptions billed to TRICARE and federal workers’ compensation.

The suppliers’ alleged price reporting and BTW’s alleged reimbursement sharing put the financial incentive in different places. In the ingredient cases, the reported benchmark helped create the pharmacy’s reimbursement opportunity. In BTW’s case, the government alleged that the wholesaler billed for the physician and divided the resulting payment.

What Evidence Is Needed to Prove Fraud?

For an arrangement like the one alleged against BTW, the evidence connects the offer to the physician, the price of the cream, the OWCP bill and the reimbursement split. We examine those connections with the insider who understands how the arrangement worked.

A sales employee may know what physicians were promised. Someone in billing may understand how the same product became a claim. Someone handling payments may know how the reimbursement was divided. Each perspective bears on a different part of the alleged transaction.

We work from that commercial detail: what the customer bought, what return the supplier offered and where the government’s money went. Your knowledge of the business can explain why the numbers belong together.

You Saw the Offer Behind the Bill

If you know how pain creams were sold to physicians or how OWCP reimbursements were shared, talk with our whistleblower experts about the arrangement you saw. We build your strongest kickback whistleblower case with you and bring in pharmaceutical fraud whistleblower lawyers who understand physician payments and federal drug billing. From the first account of the sales pitch through the pursuit of a recovery, we remain your partners.