Tricare paid $65 million for a fake scar cream for Marines who didn't actually need it

Elizabeth Howe
February 12, 2019 - 9:56 am

Photo courtesy of DVIDS

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Thanks to a scam set up by two doctors and a nurse in Tennessee, Tricare has been paying $14,500 per tube of a scar cream that sells for roughly $30 on Amazon. Since 2015, Tricare has paid a total of roughly $65 million in taxpayer dollars to fill prescriptions of this cream for Marines who don't actually need or use the cream according to the Nashville Tennessean.

Former San Diego Marine Joshua Morgan allegedly led the efforts to recruit Marines for the scam. For a cash kickback, all the Marines had to do was accept shipments of prescribed scar cream from a doctor in Tennessee they never met. 

Morgan targeted Marines from the Camp Pendleton area and convinced them they were joining a drug trial for a cream that treated pain and scars. Marines received monthly payments of roughly $300 for their involvement.

How was Tricare tricked into paying a 484 percent markup? A loophole. 

"Compounded" medicines aren't regulated by the Food and Drug Administration. The doctors in Tennessee were prescribing their scar cream as a "compounded" medication so Tricare was paying for this prescription cream without really knowing what was — or wasn't — in it. Now they've certainly paid the price. 

The two doctors and nurse in Tennessee have already pleaded guilty to defrauding Tricare. Others, including Morgan and the pharmacy in Utah that filled the prescriptions, have admitted to involvement in the scheme.

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