‘Simple accounting entry’ leads to thousands in fines and court costs for three pharmacists

Three Quebec pharmacists and business partners have been ordered to pay a collective total of $32,000 in fines plus thousands more in hearing and expert witness costs for intra-company cost transfers that have been ruled as illegal fee sharing by the Ordre des pharmaciens du Québec. Steven Haddad and Patrick Lamarche were fined $10,000 each and ordered to pay one-third of investigation and hearing expenses, including about $7,443 in expert costs. A third partner, Jonathan Banville—who dealt directly with the companies’ finances—was handed a higher fine of $12,000 and ordered to pay all expenses related to the investigation and hearing of his case. Banville was also suspended for one month for obstructing the investigation by submitting documents that concealed the trio’s misconduct, according to the disciplinary board. Each of the cases was investigated and tried separately. Read: Three pharmacists fined almost $304,000 for PSP referral and fee-sharing schemes The three pharmacists were found to have shared their fees and profits from the sale of drugs with a non-pharmacist corporate entity. This charge was based on an accounting practice that used profits from their pharmacy to cover the losses of a medical clinic they operated under a company that also managed the pharmacy and its commercial operations. According to the decision documents, the doctors who worked at the medical clinic paid rent to the parent company, which in return provided fully equipped premises for medical practice, secretarial services and clinic supplies. Due to high operating costs, the clinic suffered close to $202,000 in losses between 2015 and 2018. However the parent company still showed profits because the medical clinic’s losses were offset by the operating profits of the pharmacy co-owned by the three pharmacists. Read: An honest mistake with distressing consequences: Pharmacist gives contraceptive to patient trying to have a baby In accusing the three pharmacists, the Ordre des pharmaciens du Québec cited the profession’s code of ethics, which states that pharmacists can share their fees or profits from the sale of drugs only with another pharmacist. Furthermore, by absorbing the losses of the clinic to keep it financially afloat, the pharmacists gained the unfair advantage of potentially drawing patients from the clinic. “Indeed, although this is a purely economic offence, public perception is an important component of the protection of the public, which has the right to decide which pharmacy it wishes to do business with . . . in the absence of any link.” In their defence, the pharmacists pointed out that the money transfers were made from the pharmacy they own to a company of which they are also the sole shareholders. They also argued that the profit allocations were a “simple accounting entry” and that no monies were actually transferred to the medical clinic. Also, they added, the company never extended preferential rental rates to the clinic. Read: Pharmacist who hiked up prices for insurance claims gets $40K fine and six-month suspension

‘Simple accounting entry’ leads to thousands in fines and court costs for three pharmacists

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