Tallinn pharmacy activity license revoked over suspected fraud

Punane Pharmacy at Idakeskus, a shopping center in Tallinn's Lasnamäe District.
Punane Pharmacy at Idakeskus, a shopping center in Tallinn's Lasnamäe District. Source: ERR

Last Thursday, the State Agency of Medicines (Ravimiamet) revoked the activity license of Punane Pharmacy in Tallinn, as the tiny Lasnamäe pharmacy is suspected of misusing patients' prescriptions without their knowledge and fictitiously sold more than a thousand prescription medications and medical devices in order to draw benefits from the Estonian Health Insurance Fund (EHIF), ETV investigative program "Pealtnägija" reports.

For lifelong diabetic Jevgeni Zaterin, 35, EHIF's decision last year to start compensating a non-invasive glucose monitor was great news. The device spares the diabetic person from having to draw their own blood, instead measuring blood glucose levels automatically and transmitting them via Bluetooth to, for example, their phone.

After his doctor issued him the necessary prescriptions early last August, Zaterin headed to the pharmacy at Idakeskus, a shopping center in Lasnamäe District. Punane Pharmacy doesn't belong to a single major chain; it's a small, independent pharmacy operating under a degree-holding pharmacist.

As the device's sensors and transmitters only have a lifespan of just 10 and 90 days, respectively, meaning that users will go through a lot of them, his doctor had issued him half a year's worth of the necessary prescriptions at once. When he returned to the same pharmacy in mid-September to have the next prescriptions filled, however, he was taken by surprise.

"The pharmacy informed me that all of the prescriptions had been bought," Zaterin said. "Since I knew that I hadn't done so and that no one else had on my behalf either, I asked the pharmacy to look into how this could be possible."

When Zaterin went online to check the status of his prescriptions for himself via the online Patient Portal, he couldn't believe his eyes ⁠— according to the database, he had allegedly bought three Dexcom One glucose monitoring kits in August, including two in one day. His data in both the Patient Portal and the state portal eesti.ee indicated as though he had bought a total of ten boxes in three months.

With the exception of one transaction at Lasnamäe Südameapteek, the pharmacy where he actually bought the kit, the other prescriptions were marked as having been sold at Punane Pharmacy in Idakeskus, where he had indeed initially gone, but hadn't actually bought anything. Marked as the seller was pharmacist Emma Zaudina, who is also director of OÜ Saparal, the operator of the pharmacy.

Officials had actually been simultaneously alerted to a similar concern by another patient as well.

Thus the State Agency of Medicines, which monitors both the handling of medicines as well as pharmacy operations, and the EHIF, who is responsible for the use of medical funding, conducted their own probes.

According to Ergo Pallo, director of the EHIF's Legal Department, the health fund examined whether the prescribing doctor had competently issued the prescriptions in question. State Agency of Medicines Deputy Director General Ott Laius, meanwhile, said that the agency had reviewed Punane Pharmacy's reporting and handling of medicinal products on site at the end of August.

"As the specific matter regarding which the complaint was made was an isolated case as such, with one side's word against the other, we didn't immediately find any additional evidence with that," Laius said. "We did, however, find a number of other drug handling and quality system violations on site at that pharmacy."

None of these [violations] individually were such, however, that should have resulted in revoking the pharmacy's activity license, he added.

In other words, late last summer, no one realized where the issue lay. Once Zaterin read on social media that other people had allegedly experienced similar problems and that prescription drugs bought behind a patient's back could end up being sold illicitly, he headed back to Punane Pharmacy himself to confront them.

In a recorded conversation, pharmacy director Emma Zaudina claimed that she did fill Zaterin's prescriptions, but prevaricated that the items had gone to other diabetics.

Three times more drugs allegedly sold than ever received

As fall wore on, more similar complaints trickled into the State Agency of Medicines, and all of them from diabetics. The agency then finally moved to investigate the cases, this time more systemically, and sought the help of the EHIF.

A probe revealed that this specific pharmacy had allegedly sold some three times as many diabetes drugs than it had actually ever been shipped by drug wholesalers.

Everyone commenting on the discovery found that this kind of alleged misuse was very surprising for several reasons.

During the paper prescription era, it was easy enough in that regard — the drug was issued to the individual who dropped off a written prescription to be filled. For the past dozen years or so, however, Estonia has been using a digital prescription system, pride in which is justified. Nonetheless, situations occasionally arise where someone other than the patient themselves has to pick up a prescription — such as a child for a parent, or a parent for a child. In theory, knowing one's personal ID number is enough to get someone else's prescription filled. Ideally, pharmacies should always verify the buyer's identity as well.

According to Kaidi Sarv, chief pharmacist at the Estonian Pharmacists' Association (EAL), however, sometimes pharmacists will take the easy way out.

"It's easy to mark the patient as the buyer; their ID number is already displayed, you just mark them as the buyer as well," she explained. "But if they aren't, actually?"

The current system strikes a balance between convenience and trust, but it appears to have been terribly taken advantage of at Punane Pharmacy.

"Since we know that more drugs were allegedly sold by prescription than were actually received by the pharmacy, we suspect that the pharmacist found out an individual's personal ID number that was likely diabetic and then used that ID number to 'fill' their valid prescriptions," Laius explained. "They marked the prescription as sold, then applied for EHIF compensation for it, but in reality the packaging didn't budge."

According to Pallo, they're talking here about thousands of packages that were allegedly sold, for which EHIF paid, but in reality, according to the health fund's current information, had never actually been dispensed to people by the pharmacy.

"In other words, they essentially sold thin air, but EHIF was given the impression that people were being sold prescription drugs," the fund's legal director summed up.

€100,000 in nonexistent prescriptions

The case centers around the EHIF discount, which is steep in the case of diabetes — 90 percent in the case of the Dexcom One monitor prescribed to Zaterin. Thus, taking the national price ceiling into account as well, the full price of a purchase made in September, for example, was €79.34, of which EHIF covered €68 and the patient left to pay €11.34. According to the allegations, the suspect sold nonexistent goods in order to get that compensation.

According to Laius, the final numbers are only just being calculated, but the State Agency of Medicines has grounds to believe that somewhere in the ballpark of €100,000 worth of invoices were issued for nonexistent drugs.

Emma Zaudina, director of the pharmacy and the individual marked as the seller on all of the suspicious transactions, refused to be interviewed. "Pealtnägija" exchanged several emails with the pharmacist, and she initially claimed that there is no problem.

"Only Mr. Zaterin came to us with explanations regarding his complaint, and we resolved that issue," Zaudina wrote. "Patients come to us and say that we have good discounts on drugs. We can't use prescriptions without a patient's knowledge because we need their ID card."

In an additional letter, Zaudina implied that this could have been an IT issue.

Regardless, the EHIF doesn't believe her explanations and intends to file a criminal offense report in order to recoup the undue payouts.

On the grounds of prior issues as well, the State Agency of Medicines revoked OÜ Saparal's pharmacy activity license on January 26. The agency's decision is subject to appeal for a period of 30 days.


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Editor: Aili Vahtla

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