Local Pharmacy Owner Faces Legal Action for Misuse of Funds Meant for HIV Treatment Program

The state of Oregon has taken legal action against Trushar Patel, the owner of Corner Drugs & Gifts in Gold Beach, Oregon, alleging that he diverted money from a program designed to assist low-income individuals in accessing HIV treatments. The lawsuit, filed by the Oregon Health Authority, contends that Patel utilized the funds as a "slush fund" to expand his business. The legal dispute revolves around a federal program, known as 340B, aimed at facilitating access to HIV treatments for those in need.

Patel, a resident of Washington County who owns five pharmacies in western Oregon, entered into a contract with the state program to distribute discounted HIV treatment drugs. However, the lawsuit alleges that he failed to remit a portion of the proceeds to the state's health authority, as required by the agreement.

The lawsuit, filed in Washington County Circuit Court, offers insights into the workings of Oregon's CAREAssist Program, which seeks to make life-saving medications more accessible. CAREAssist relies on the controversial federal 340B program, and Patel's case sheds light on the complexities associated with this initiative.

Patel, who owns businesses such as Pramukh, Inc., doing business as Physicians Building Pharmacy in Salem, signed up for the CAREAssist Program in 2016. The lawsuit claims that between 2017 and 2019, Patel diverted millions of dollars intended for the health authority for personal use. Alleged expenditures include the purchase of a home in Northwest Portland, improvements to the property, and the acquisition of four additional pharmacies.

The lawsuit asserts that Patel's use of funds extended to activities such as artificially inflating revenue, enhancing personal income for favorable lending terms, and acquiring various assets. The CAREAssist Program, federally funded and administered by the state health authority, aims to cover healthcare costs for HIV-positive residents. Participating pharmacies, contracted under the 340B program, receive medications at a reduced cost, collecting fixed fees for dispensing orders, and passing on payments from insurers to the health authority.

The health authority claims that Patel, after admitting to owing $2.5 million in a sworn statement, agreed to a repayment plan in 2019. However, he failed to meet the terms, leading to subsequent payment plans in 2020 and 2021, both of which Patel defaulted on. Although Patel repaid over $1.6 million, the health authority asserts its entitlement to the full owed amount, along with 9% annual interest. Patel has yet to file a response to the lawsuit at the time of reporting.