Pharmacy Owners Plead Guilty in Medicaid Fraud Involving Unregulated HIV Medications

A Philadelphia pharmacy has agreed to pay over $2 million in restitution after pleading guilty to felony Medicaid fraud involving unregulated HIV medications.

Just the Facts

Haussermann’s Pharmacy, owned by Surnil Pharmacy Inc, pleaded guilty following an investigation by the Pennsylvania Office of Attorney General’s Medicaid Fraud Section. Surnil Pharmacy Inc, owned by pharmacist Subhash Patel, also operated several other pharmacies. Earlier this year, the company was charged for its role in a multimillion-dollar scheme to defraud Medicare and Medicaid by seeking reimbursement for medications not obtained through legitimate channels.

The Office of the Attorney General’s Medicaid Fraud section began investigating Haussermann’s Pharmacy and interviewed its employees, who confirmed that Patel had been acquiring costly HIV medications from an illegitimate source. Patel allegedly bypassed legitimate wholesalers and stocked the illicitly acquired medications on the pharmacy shelves to be dispensed to patients. Employees told investigators that the bottles were sticky to the touch, as though their labels had been removed.

Investigators were able to determine that the medicines had not been purchased from one of the pharmacy’s legitimate wholesale drug suppliers. It was estimated that approximately 100 000 tablets of unregulated HIV medication were dispensed from the pharmacy. The pharmacy then billed Medicare and Medicaid for reimbursement. Investigators found no evidence, however, that any patient experienced physical harm or injury from taking the unregulated medication.

The Plea and Sentence

On October 1, Surnil Pharmacy Inc pleaded guilty in Philadelphia County Court. The company agreed to pay $2.3 million in court-ordered restitution to Medicare and Medicaid.

As part of the plea agreement, pharmacist and owner Subhash Patel is prohibited from being a Medicare or Medicaid provider for at least 5 years, and his pharmacist license is suspended for that same time period. Haussermann’s Pharmacy and 4 other pharmacies owned by Patel—West Girard Health Pharmacy, East Lehigh Health Pharmacy, Frankford Health Pharmacy, and 11th and Walnut Pharmacy—have since closed.

“The distribution of life-saving medications is appropriately strictly regulated. This company put profits over their patients and broke the law to ignore those regulations for their own benefit,” Attorney General Sunday said in a press release. “I commend our Medicaid Fraud Control Section and our partners with the Department of Health and Human Services for a meticulous investigation that led to the stoppage of these unregulated sales and the recovery of millions of dollars that will benefit underserved citizens.”

Reference

AG Sunday: Philadelphia pharmacy pleads guilty, will pay $2.3M restitution for Medicaid fraud scheme involving unregulated HIV meds. Press release. David W. Sunday, Jr, Pennsylvania Attorney General. Published October 1, 2025. Accessed October 15, 2025. https://www.attorneygeneral.gov/taking-action/ag-sunday-philadelphia-pharmacy-pleads-guilty-will-pay-2-3m-restitution-for-medicaid-fraud-scheme-involving-unregulated-hiv-meds/