A New York doctor today admitted using his medical license – and allowing others to use his medical license – to purchase Herceptin and Rituxan, prescription oncology medications, under false pretenses for the purpose of selling them at a profit.
Jon Paul Dadaian, 53, of New York, a board-certified anesthesiologist and pain management specialist, pleaded guilty before U.S. District Judge Susan D. Wigenton to an information charging him with unlawfully selling prescription cancer medication, which had been previously purchased using his medical license and under the representation that such medication was to be used to treat his patients.
According to U.S. Attorney Philip R. Sellinger, documents filed in this case and statements made in court, while operating a medical practice in Elmwood, New Jersey, Dadaian befriended two individuals who owned and operated two businesses that were wholesale distributors of prescription drugs.
At the request of these individuals, and in return for approximately $130,500 in payments, Dadaian used his medical license – and allowed others to use it – to purchase expensive prescription drugs, primarily, cold-chain biologic infusion medications that are typically used to treat cancers, macular degeneration, and autoimmune diseases.
By recruiting Dadaian and using his medical license to purchase the drugs, the two individuals were able to obtain prescription drugs from the pharmaceutical manufacturers’ authorized distributors that they would not otherwise have been permitted to purchase.
They were then able to sell them at a profit through their two businesses.
By using Dadaian and his medical license to purchase their prescription drugs, these two individuals also obtained discounted community physician pricing for the prescription drugs with respect to some of the drug purchases.
The discounted community physician pricing was based upon specialized discounts that the pharmaceutical manufacturers only offered to treating physicians.
The two individuals and their businesses would not have been qualified to receive this favorable pricing if they had attempted to purchase the prescription drugs directly from the pharmaceutical manufacturers.
In purchasing the drugs, Dadaian and the two individuals made numerous false and misleading representations to the pharmaceutical manufacturers and authorized distributors, including that Dadaian purchased the drugs to use to treat his patients, and that the drugs would not be resold or redistributed.
In actuality, none of the drugs were administered to Dadaian’s patients but were ultimately sold to customers of the two businesses for a profit.
The scheme ran from June 2012 through April 2018, during which tens of millions in prescription drugs were purchased in Dadaian’s name and using his medical license.
The sale of prescription drugs purchased by a healthcare entity is punishable by a maximum of three years in prison and a $10,000 fine.
In his plea agreement, Dadaian also agreed to make restitution for the full amount of any loss resulting from his offense.
Sentencing for Dadaian is scheduled for Sept. 20, 2022.