So what can McAllen ISD do with Fred’s Pharmacy Field?

Rx closes its doors on 23rd St.
By G. Romero Wendorf

McALLEN – The football field at McAllen ISD’s Veterans Memorial Stadium on Bicentennial is still named Fred’s Pharmacy Field even though Fred’s is no longer located in McAllen.  Fred’s fled the field so to speak, but his name lingers on.

Recently, Fred’s sole pharmacy on 23rd Street closed its doors. Today, the building is nothing but an empty shell.

So where is Fred, AKA, its owner, Pharmacist Santos O. Gonzalez? No one apparently knows. The Advance called his cell number last week, left a message, but got no call-back.

Gonzalez still has a Fred’s Pharmacy store open in Falfurrias, albeit under a different corporate name, even though his name is now missing from McAllen city limits.

Word among local pharmaceutical sources is that he bought into a local compounding drug store, and that it may have some connection to Pharr Family Pharmacy, but that is yet to be confirmed.

Still no word from the feds – the FBI, United States Postal inspectors – on why they raided the Pharr Family Pharmacy on the corner of Sam Houston and Cage Boulevard last July, which resulted in it being shut down for approximately four days. Patients who had prescription drugs waiting inside to be picked up had to scramble for Plan B.

Around the country, raiding pharmacies has turned into a relatively big endeavor for federal investigators. It all has to do with the so-called compounding drug scam making its way around the U.S. To date, Pharr Family Pharmacy hasn’t been charged with any wrongdoing, and today, it remains open for business.

At the time of the surprise fed bust, the pharmacy’s owner, John Aguedo Rodriguez, refused to speak to the media, and instead hired a media consultant who assured the community that Pharr Family Pharmacy had not been shut down, its locked doors notwithstanding.


A New Owner

It is now rumored inside pharmacy circles that the Pharr Family Pharmacy has a new owner. The Advance is still waiting for a call-back to confirm change of ownership, and whether or not Fred’s Santos Gonzalez has bought into the business.

If so, rumor among local pharmacists with whom this newspaper spoke indicates that Gonzalez is in charge of a small compounding drug lab allegedly attached to the rear of the Pharr Family Pharmacy on Cage, while its principle new owner, himself a registered pharmacist who bought out John Rodriguez, is now working as the front man for the drug store.

The Advance left word for him as well, asking to please call back, but so far no response.

To secure the naming rights to Fred’s Pharmacy Field at McAllen ISD’s Veterans Memorial Stadium several years ago, Santos Gonzalez plunked down a little more than $200,000. He still owes the district approximately $300,000 more for the naming rights, which will secure naming the high school gridiron Fred’s Pharmacy Field for the next 10 years.

The initial $500,000 for the naming rights was supposed to be paid out over five years, $100,000 per year.

If Gonzalez is unable to come up with the approximate $300,000 balance over the next three years that he still owes for the football-field naming rights, even though Fred’s no longer exists in McAllen, the school district will have to decide where to go from there, according to a school source.

First, it will have to find a sponsor with deep pockets willing to pony up the approximate $300k balance, then tear down Fred’s Pharmacy Field from atop the scoreboard and replace it with another.

Not a cheap endeavor.

Then, finally, the school district will have to decide what to do with all the printed material it has on hand with Fred’s Pharmacy Field proudly splashed across the front.


Compounding Scandal and $$$

Again, despite the fed raid last July, there is still no evidence of wrongdoing on the part of Pharr Family Pharmacy.

In Hidalgo County, Pharr Family Pharmacy is, or was, considered to be one of the four pharmacies that are big into compounding drugs. Today, across the country, scandals tied to compounding drugs is drawing a lot of media attention.

Just this week, USA Today published a story titled: Doctors, pharmacists indicted in $100M fraud case.

According to the story, more and more compounding pharmacists are hooking up with physicians with the help of marketers, and then giving them kickbacks for the lucrative compounding prescriptions sent their way.


What is compounding drugs, you make ask?

Typically, according to industry sources, they are manufactured by compounding pharmacies, which specialize in the creation of special creams that may include pain relievers such as ketamine, or even antidepressants, muscle relaxants, and anti-inflammatory medications that have been converted from their original forms, be it tablets, liquids or powders (Source: Healthcare Finance).

Because they offer customized versions of drugs, compounding pharmacies are traditionally reimbursed by third-party payers.

In February of last year, The Dallas Morning News ran a headline: “Feds investigate North Texas compounding pharmacy accused of paying doctor kickbacks.”

Allegedly, the pharmacy, RXpress Pharmacy, was paying sales reps commissions to market the pharmacy’s services to physicians as part of what the feds describe as a “violation of federal anti-kickback laws.”

According to the same DMN story, the North Texas case was part of a multi-state investigation that involved both civil and criminal charges, which had already resulted in criminal indictments and multi-million-dollar civil settlements.

“The lawsuits and investigations raise legal and ethical questions about business relationships between doctors and pharmacies. Federal law prohibits pharmacies from giving physicians anything of value in exchange for prescription referrals.” (Source: Dallas Morning News; Feb. 5, 2016).

The story published by Healthcare Finance said that these specialty compounding creams, many of them, have little to no medicinal value, and yet garner a small fortune for those who manufacture them.


Tricare, the military health insurance provider that insures approximately 10 million veterans, has paid big money for compounding drugs, as have Medicare, Medicaid, and third-party health insurance providers.

So in essence, as is so often the case, taxpayers are getting screwed to enrich the very few.

On the heels of the first Dallas Morning News story in early February 2016, came another, headlined: “Dallas firm that marketed compounded pain creams busted in massive health care fraud, kickback case” (Feb. 24).

That story made mention of the owners of a Dallas firm that marketed topical creams – for pain and scars – and then kicked some money back to the docs prescribing them, which federal authorities say bilked taxpayers out of $65 million because most of the claims were made to Tricare, the military healthcare system, funded with taxpayer dollars.

In Southern California last month, according to a story published by The Los Angeles Times, 22 people – including physicians and a pharmacist – were arrested and charged with costing taxpayers hundreds of millions of dollars. All tied to high-priced specialized compound medications.

According to The LA Times story, there were 13 criminal cases filed in federal courts that included “conspiracy, money laundering, kickback schemes, and identity theft.”

Earlier this year, The Wall Street Journal ran a story with the headline: “U.S. Probes Possible Fraud Linked to Compounding Creams.”

Read the WSJ:

“The Justice Department is investigating what authorities suspect is half a billion dollars in health-care fraud linked to specialty creams used to treat pain and other ailments, and believe an insurance program for veterans may have been the biggest victim.”

Sales of these so-called compounding creams, read the WSJ, have surged recently thanks in part to a marketing blitz, including pitches by retired NFL quarterback Brett Favre, that has promoted them to the elderly, athletes, and others.”

In the USA Today story published this week, the lead paragraph read:

“A dozen doctors, pharmacy owners, and marketing pros have been accused of a kickback scheme that prosecutors allege involved a sham medical study used to bilk up to $102 million from the publicly funded federal health program for military family members.”

To underscore how lucrative the compounding business may be for some, a local pharmacist texted this newspaper a photo last year of a local “marketing pro” based in the RGV, allegedly tightly connected to the Valley’s compounding pharmacies. Her decked-out back yard that included a high-priced swimming pool and a lush estate, suggested a home that might sell for something well into the mid-six figures.

Another pharmaceutical source told this newspaper that he knows one local compounding pharmacist who must have a fleet of a dozen high-priced cars.

So what, if anything, Pharr Family Pharmacy and Fred’s Pharmacy Owner Santos Gonzalez have to do with the business of compounding drugs isn’t yet known. Neither is the reason behind the fed bust last summer.

Meanwhile, according to a McAllen school source, the district didn’t even know Fred’s Pharmacy had closed its McAllen location until this past fall. Fred’s apparently never called to say bye.

It does seem to be the case, however, that former Pharr Family Pharmacy owner John Rodriguez has disappeared from sight.

When The Advance called the Pharr-based pharmacy to ask to speak to the new owner, we were told that he wasn’t picking up his extension. So we left a message.

When we asked if John Rodriguez had been around recently, we were told no.

When we asked if Santos Gonzalez had been seen working around the Pharr Family Pharmacy, we were told that he usually enters through the back entrance.

What any of this means is yet to be determined.

One thing is certain, however -- while the name Fred’s Pharmacy Field may still be in place at McAllen’s Veterans Field, the Fred’s Pharmacy location in McAllen is no more.

Two years ago, Texas changed its employee benefits program to limit reimbursement for compound drugs to $300. Apparently, it didn’t have much choice considering that the Texas Employees’ Retirement System’s compound drug costs had gone up 4,600 percent over five years.

As the USA Today story pointed out, there’s gold in them there compounding pharmaceutical hills.

Advance Publishing Company

217 W. Park Avenue
Pharr, TX 78577
Phone: 956-783-0036
Fax: 956-787-8824