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New lawsuit against Renaissance Rx accuses embattled pharmacogenetics firm of fraud, illegal activity

By Louisiana Record reports | Apr 28, 2015

NEW ORLEANS – Nearly six months after a multi-million dollar study was shut down in the face of a Medicare review by the federal government, New Orleans-based pharmacogenetics firm Renaissance Rx is facing new allegations from a Rhode Island doctor that the company funneled fraudulent and illegal Medicare tests through his office without his knowledge.

In a lawsuit pending in the United States District Court for the District of Rhode Island, Scott A. Wilson, a doctor specializing in internal medicine, said he and his clinic, Cumberland-based Physicians Rhode Island Medical, contracted with Renaissance Rx to enroll patients in the Diagnosing Adverse Drug Reactions Registry (DART), a study designed to determine a patient's genetic disposition to certain pharmaceutical drugs.

While Wilson initially agreed to participate in the study, he claims that after only 30 tests he discontinued his involvement due to concerns over the study’s legality and his opinion that it was running counter to guidelines and regulations regarding clinical trials.

In particular, Wilson objected to how the study was being operated. He claims that Renaissance Rx was engaging in fraudulent behavior by using improper medical codes to process as many cheek swab samples as possible without concern for whether a patient was eligible for either the study or for reimbursement through Medicare.

“[Renaissance Rx] generated revenue by and through each ‘swab’ it/they conducted within the context of the DART Study, including, without limitation, by and through the use of erroneous and/or fraudulent Codes on the eCRFs to fraudulently bill the conduct of the trials to Medicare/Medicaid,” Wilson’s lawsuit states.

In addition, Wilson purportedly found that against his wishes and without his permission he was enrolled in the program as a "Regional Principal Investigator," tasked with responsibility for oversight of numerous DART sites.

Subsequently, Wilson said his signature was fraudulently attached to the forms of thousands of patients who were enrolled in the study and the resulting tests conducted on them that were worth an estimated $10 million to Renaissance Rx. Wilson alleges that his supposed role as a Regional Principal Investigator was touted in Renaissance Rx’s promotional materials for up to eight months after he had notified them of his wish to discontinue his relationship with the company.

In the lawsuit, Wilson states that because of the misappropriation of his name for Renaissance Rx’s testing purposes he fears potential civil liability as well as loss of his ability to practice medicine due to the company’s flouting of laws and regulations.

Renaissance Rx rise and fall

Renaissance Rx was a success story in the City of New Orleans’ renewed efforts to create a viable tech economy in the city. Originally known as UTC Laboratories, Renaissance Rx set up shop in 2012 in the New Orleans BioInnovation Center where it quickly grew from a handful of employees to hundreds nationwide at its peak last fall.

In November 2014, the company received a multi-million dollar investment from investment firm TPG Growth. Yet, only a month later signs of the biotech firm’s decline began to appear when its primary income source was shut down after a Medicare review was initiated.

Later was it revealed that two of the registered officers of Renaissance Rx were no longer listed in the companies incorporation records and that the firm reincorporated itself in the state of Delaware only days before the TPG investment.

The DART study enrolled patients to have DNA samples gathered through cheek cheeks swabs that were forwarded to Renaissance Rx’s labs for analysis to determine patients’ genetic disposition to certain pharmaceutical drugs. The DART tests cost $600 apiece, which was paid for by Medicare. At its height, Renaissance Rx was processing 1,200 to 1,600 such tests per day, according to an article in The Times-Picayune.

The sudden “temporary” stoppage of the multi-million dollar DART study in December resulted in the layoff of hundreds of Renaissance Rx’s workforce and, according to inside sources who have asked not to be identified, the company has been unable to pay sales staff for work completed late last year and in the months since.

While the suspension of the DART study was initially only anticipated to last three months, it has now stretched to the five month mark without any sign that Medicare funds will be turned back on anytime soon.

When asked about potential fraud on Renaissance Rx’s behalf when the study was first reported as having been suspended earlier this year, Tony Salters, a spokesman for the Centers for Medicare & Medicaid Services, said any questions should be directed to agencies that deal with fraud and crimes such as the Office of Inspector General, Department of Justice and even local law enforcement agencies.

Neither the Office of Inspector General and Department of Justice responded to a request for comment.

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