PIN Rx Found Guilty By Maine State Board of Pharmacy

In How Good Are Your Drugs? (Part 3), I followed the case of PIN Rx. In 2005, the State of Maine issued a license to the Penobscot Indian Nation to dispense mail order pharmaceuticals. Not only did the state issue a license, they also entered into a partnership with the Penobscot Nation. Although its initial business plan to market affordable medications to lower income patients was touted by state officials to save money, many from the start doubted PIN Rx’s ability to contain costs. According to the nonprofit Prevent Medical Error, because their rural location would add additional expense to receive and distribute prescriptions, and these costs cannot be passed on to Medicaid recipients, PIN Rx may have been at a financial disadvantage from the beginning.

As early as February 2006, the partnership, to offset mounting losses, began to dispense pharmaceuticals forwarded to them by Internet sources, many without valid prescriptions.

On Tuesday, May 15, 2007, PIN Rx and two of its pharmacists were found guilty of multiple violations in connection with the sale of over 180,000 Internet prescriptions totaling an estimated $3 million.

The Board of Pharmacy found PIN Rx guilty of 16 of 18 counts. PIN Rx, a defunct corporation, must pay half of the cost of the hearing and a fine of $500,000. In addition, two PIN Rx pharmacists were found guilty as well. Reginald Gracie, Jr., was found guilty of 16 of 18 counts. His pharmacy license has been permanently revoked and he was issued a letter of reprimand. Gracie has been ordered to pay $300,000 in fines as well as reimburse the state for half the cost of the hearing.

Mr. Gracie allegedly received over $100,000 in kickbacks from Internet order centers. During the hearing, Mr. Gracie invoked his Fifth Amendment right against incrimination. He plans to appeal the board’s decision.

Pharmacist Susan Tringale was found guilty in 12 of 18 counts. She received a one month license suspension and a $5,000 fine.

PIN Rx board members did not participate in the hearing, stating that they are no longer in business. It is unclear how the fine against PIN Rx would be paid, since the company ceased operations and has turned in its license.