Medly pharmacy lawsuit: Navigating Challenges

In the pharmaceutical landscape, controversies can arise, and the Medly Pharmacy lawsuit is no exception.

This article delves into the multifaceted aspects of the lawsuit, shedding light on the regulatory challenges, legal intricacies, and the ripple effect on Medly Pharmacy.

In a significant development, a 61-year-old doctor, Dr. Ajay Kumar Aggarwal, and his compounding pharmacy, Medley Compounding Pharmacy LLC, have paid a substantial sum of $7,963,246 to settle allegations of improper billing to the Department of Labor, Office of Workers’ Compensation Program (DOL-OWCP). U.S. Attorney Alamdar S.

Hamdani announced the resolution, shedding light on the intentional submission of false claims for medically unnecessary compounding creams, gels, and pain patches.

Knowingly False Claims:

Dr. Aggarwal and Medley Compounding Pharmacy knowingly and willfully submitted false claims to DOL-OWCP.

The investigation revealed that the medications in question were neither medically necessary nor beneficial to the patients, raising concerns about the ethical practices of federally funded programs.

Excessive Medication Delivery:

A startling revelation emerged as DOL-OWCP beneficiaries were found to be receiving excessive and unnecessary medication through the U.S.

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mail. This misconduct added a layer of severity to the case, indicating the extent of the alleged fraudulent practices.

Violation of Federal Responsibility

U.S. Attorney Hamdani expressed the egregious nature of providers violating their responsibility to the public, especially when participating in federally funded programs like OWCP. The allegations pointed towards a breach of trust, dispensing unnecessary medications and services to the federal workforce.

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Ownership and Operations

Dr. Aggarwal, who owned and operated A.A. Texas Anesthesiology Back Pain Center, allegedly wrote prescriptions for compound pain medications for injured federal employees.

Medley Compounding Pharmacy, owned on paper by Aggarwal’s wife, filled these prescriptions. The billing to DOL began in 2013, a year after Medley opened its doors.

Whistleblower Lawsuit:

The investigation kick-started with a qui tam, or whistleblower, lawsuit filed under seal on October 10, 2017. An employee at Medley witnessed patients receiving unnecessary medications through the mail, despite not needing or benefiting from them.

The lawsuit revealed instances where patients had no interaction with Dr. Aggarwal, and Medley employees were allegedly instructed to auto-fill medications monthly without considering medical need.

Settlement Details:

The settlement, reaching $7.96 million, serves as a testament to the dedication of investigative and legal teams.

The False Claims Act allows private parties to file actions on behalf of the United States, with the relator receiving a portion of the recovery. In this case, the relator will be rewarded $1,353,752.

Investigative Collaboration:

The investigation was a collaborative effort between the Department of Labor Office of Inspector General (DOL-OIG) and the United States Postal Service – Office of Inspector General (USPS-OIG).

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Special Agent in Charge Jonathan Ulrich from USPS-OIG emphasized their commitment to investigating cases to root out fraud, waste, and abuse.

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Upholding Program Integrity:

Special Agent-in-Charge Steven Grell of DOL-OIG highlighted the agency’s dedication to protecting the integrity of programs administered by OWCP.

Collaborative efforts with the Department of Justice aim to vigorously pursue allegations of fraud involving these crucial programs.


The settlement not only marks a significant financial consequence for Dr. Aggarwal and Medley Compounding Pharmacy but also serves as a reminder of the ongoing efforts to combat fraudulent practices within federally funded healthcare programs.

The collaborative investigation between DOL-OIG and USPS-OIG underscores the commitment to upholding the integrity of such programs.


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