$15 Million Settlement Against ‘The Pill Club’

By Desert Star Staff

OAKLAND — California

Attorney General Rob Bonta today announced a $15 million settlement against The Pill Club, a Silicon Valley startup operating an online pharmacy for birth control and contraceptives. The investigation by the California Department of Justice (DOJ) found that The Pill Club defrauded Medi-Cal of millions of dollars by dispensing and reimbursing for expensive products that customers had not asked for and submitting reimbursements for ineligible services and prescriptions.

“The Pill Club unacceptably siphoned off

Medi-Cal funding intended to help vulnerable communities access essential healthcare,” said Attorney General Bonta. “I am grateful to the whistleblowers and our investigators who held The Pill Club accountable.

The Pill Club was formed in 2016, offering California patients, including Medi-Cal beneficiaries, an online-only prescription and delivery service for reproductive care-related products. The DOJ’s Division of MediCal Fraud and Elder Abuse (DMFEA) found over a threeyear-long investigation that the company defrauded the Medi-Cal program in several ways, including by: Billing for services it had never rendered. For example, investigators found multiple instances in which the company had submitted claims for 30-minute faceto-face counseling sessions when The Pill Club’s nurse practitioners had no direct or real-time contact with those patients. In addition, investigators found as many as 3,000 Medi-Cal claims submitted by the Pill Club for purported medical services that were never rendered.

Dispensing enormous quantities of costly products its customers had not asked for. For example, DOJ investigators found that The Pill Club distributed shipments of FC2 female condoms to multiple women who were Medi-Cal beneficiaries but who had no interest in receiving or using these devices. The company billed Medi-Cal for these products at prices that were, on average, 250% higher than the retail price. FC2 would be sent out as part of a ‘bundle’ when patients requested emergency contraception. Patients could not easily opt out of the bundle. In addition, the Pill Club regularly sent the maximum quantity of FC2 to new patients and with refills. As a result,

Medi-Cal beneficiaries were sent massive amounts of FC2 — sometimes as many as 96 were dispensed at a time — and The Pill Club was, in turn, reimbursed as much as $2,253.80 for a single prescription delivery. The DOJ investigation found The Pill Club continued sending many patients large quantities of condoms and submitting Medi-Cal claims for the condoms, even after the patients asked to stop receiving them.

The claims resolved by the Settlement are allegations only, and there has been no determination of liability.