340B Administrator Sues Over Breached Contract

On Friday a case was filed in the Western District of Oklahoma by Elite Analytics Group Inc. against Revan Health and its subsidiaries. The plaintiffs allege breach of a pharmacy contract.

Elite Analytics, according to its complaint, is a third party administrator specializing in providing services for pharmacies and clinics participating in the federal 340B program. The 340B program is a program designed to provide access to prescription medications to populations that would otherwise have difficulty paying for prescriptions by offering mandatory discounts from the full sale price.

Elite Analytics said it provides the services of maintaining the documentation so that the discounts are only applied to eligible individuals. Audits of the patient records are also a part of this process. Elite Analytics also provides advance funds for the purchase of the 340B program drugs which the pharmacies reimburse after receiving payment from the patients insurance.

The plaintiff entered into a contract with Revan Health to provide the services as indicated above. However, after a routine check to confirm a prescription that was part of the 340B program, the plaintiff said they discovered irregularities and demanded an audit per the terms of the contract.

After initially agreeing to comply with the requested audit, plaintiff indicates that the defendant refused to provide documents or permit inspection of the records. In addition to the audit default, plaintiff argues that the defendant is in arrears regarding the payments due under the contract. The plaintiff also received a whistleblower complaint regarding financial transactions performed by the CEO of Revan Health, Justin Evans, which were not compliant with federal law, but also risked the ability of Revan Health to comply with the payment portions of the contract.

The plaintiff is suing for breach of contract, fraud in the inducement regarding the advancement of funds for purchase of 340B drugs that was instead diverted to other purchases, and conspiracy to misappropriate funds. The plaintiff is represented by Wilson Elser Moskowitz Edelman & Dicker LLP.