A group of pharmacies that specialize in radiopharmaceutical products has sued Cardinal Health, accusing the Dublin drug distribution company of hiding behind front companies to land government contracts mostly tied to the Veterans Administration.
UPPI, a cooperative based in Georgia, filed what’s called a False Claims Act against Cardinal in federal court in Washington state.
The group claims the amount of money involved tops $10 million.
Cardinal Health has denied doing anything improper.
Radiopharmaceutical products are used to diagnose and treat medical conditions. The government buys the products through a competitive contracting process that gives preferential treatment to small businesses, according to the lawsuit.
In this case, Cardinal is charged with getting contracts meant for small businesses owned by service-disabled veterans who can obtain the contacts without competitive bidding.
Cardinal is accused of hiding behind front companies that could not perform the work required for the contracts. Once the front companies got the contracts, Cardinal did most of the work and received most of the money while giving a portion of the money to the front companies, according to the lawsuit.
The result is that Cardinal made millions of dollars from contracts set aside for small businesses, the lawsuit claims.