WASHINGTON (CN) — A federal judge declined to issue a temporary restraining order Tuesday to release over $3 million in overdue payments from the government to a Florida pharmaceutical company and reinstate its enrollment in a federal HIV prevention program.
Turner Drugs recently joined a Department of Health and Human Services program intended to make the drug commonly known as PrEP more readily available to at-risk populations. Pre-exposure prophylaxis can be taken by pill or injection and can reduce the risk of contracting HIV via sex by about 99% when taken daily.
The department suddenly denied the company’s prescription requests on March 12, freezing over $3 million in payments owed to the company for 1,488 prescriptions, Turner Drugs said in a suit filed Friday. Officials merely cited “suspicious activities” and on March 14 promised an audit, which the pharmaceutical company says still hasn't happened.
Turner says those funds were necessary to prevent it from potentially dissolving on Thursday — when payroll is due — after which medical staff would be laid off and free clinics throughout Northern and Central Florida would close.
U.S. District Judge Trevor McFadden, a Donald Trump appointee, said he would consider scheduling a later hearing to consider Turner Drugs’ request for a preliminary injunction, but not before Thursday. He floated an April 12 date for the hearing and recommended the parties try to settle the issue between themselves.
Turner operates free medical clinics through another company, Continuous Care Center, that treat HIV and other infectious diseases among Florida’s unsheltered and underserved patient populations.
According to a 2020 Centers for Disease Control and Prevention analysis, Florida faces the fourth-highest rate of new HIV infections, at 18.2 infections per 100,000 people.
Central Florida, and Orlando in particular, has an acute struggle with the disease. Orlando sees higher rate of HIV-postive residents than the state average, and nearly double the national average, according to a Nov. 14, 2023, report by AIDSVu. The report used 2021 data from state and city health departments and was completed by researchers at the Emory University Rollins School of Public Health.
The Department of Health and Human Services launched the Ready, Set, PrEP in February 2019 with the aim of ending the HIV epidemic and reducing new infections by 75% in five years and 90% in 10 years.
In February, Turner Drugs began filling prescriptions under the program that had for the previous four years been handled by Kay Pharmacy.
According to attorneys for Mercalis Inc., which administers the program on behalf of HHS, Turner Drugs raised a number of red flags when it filled nearly 1,500 prescriptions for PrEP between February and March — well above the average of five the company normally saw each month.
Brian Iverson, of the firm Bass Berry, said Mercalis became concerned the spike was indicative of fraud and set out investigating the prescriptions. Auditors began to call supposed patients, some of whom said they had never spoken with anyone from the clinic or that they had never received medication.
While attorney Edward Griffith, representing Turner, couldn't disprove those claims, he reminded the judge that the company primarily serves unsheltered people who face a myriad of other health concerns — and had only begun its work last month.
He noted that Kay Pharmacies had faced a similar, sudden termination from the program in January 2023, but was able to reach a settlement soon after litigation began. The termination was determined to be an error.
Part of that settlement agreement allowed the release of $4.6 million back to the company, with $770,000 held by Mercalis to conduct an audit into 400 randomly selected prescriptions. The audit concluded the prescriptions were valid and delivered to eligible patients, and the remaining $770,000 was released to the company.
Griffith argued that Turner Drugs wasn't given the same opportunity, nor a 40-day notice of termination, and because of its fledgling status the disparity would have lasting consequences for the company and its patients.
Judge McFadden, after considering the government’s argument that it was not party to the agreement between Turner Drugs and Mercalis, and therefore should not have been dragged into court, indicated he would dismiss the government from the case.
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