What happened: Allstate alleges three New York pharmacies ran the same scheme - billing hundreds of thousands of dollars for overpriced pain ointment dispensed through illegal kickback arrangements with no-fault auto clinics.
Who's involved: Four Allstate entities as plaintiffs; Narrow Pharmacy Inc. (Brooklyn), Redfern Drugs Inc. (Far Rockaway), and Punjab Rx Pharmacy Inc. (South Richmond Hill) as defendants.
What's at stake: More than $414,000 in combined recovery sought, plus more than $703,000 in unpaid claims Allstate wants declared void.
Why it matters: A coordinated salvo targeting the pharmacy end of no-fault fraud - the billing patterns alleged here are a practical guide for SIU teams investigating similar pipelines.
Where it stands: All three complaints filed September 30, 2026, in the US District Court for the Eastern District of New York.
Up to $1,900 for a tube of prescription pain ointment. Under $20 for a similar over-the-counter version.
That pricing gap sits at the centre of three federal lawsuits Allstate filed on the same day against three separate New York pharmacies, alleging each ran the same play to exploit the state's no-fault auto insurance system.
The complaints, filed September 30, 2026, in the US District Court for the Eastern District of New York, target Narrow Pharmacy Inc. in Brooklyn, Redfern Drugs Inc. in Far Rockaway, and Punjab Rx Pharmacy Inc. in South Richmond Hill. All three are brought under the federal racketeering statute, known as RICO, alongside New York common-law fraud claims. Together, Allstate says it is chasing more than $414,000 already paid out on what it calls "fraudulent" claims - plus triple damages under RICO and a court order voiding more than $703,000 in outstanding bills.
The scheme described across all three complaints follows the same template. Allstate alleges each pharmacy entered "illicit financial relationships and/or compensation arrangements" with no-fault medical clinics in the New York metro area. Those clinics would see patients involved in car accidents and, as a matter of what the filings call "pattern, practice and protocol," prescribe expensive topical Lidocaine 5% ointment and a handful of oral medications, regardless of whether the patient needed them.
The prescriptions were then filled by the defendant pharmacy and billed directly to Allstate. Narrow Pharmacy allegedly billed $1,222 for 200 grams and up to $1,527.50 for 250 grams of Lidocaine 5% ointment, according to that complaint. Redfern Drugs allegedly charged up to $1,920.90 for 250 grams. Punjab Rx allegedly billed $1,907.50 per prescription for the same quantity.
Over-the-counter alternatives containing lidocaine at 4% - products such as Aspercreme, Icy Hot, and Bengay - retail for under $20 for a 133-gram tube, the complaints state. The filings allege the prescribing clinics never documented why the prescription version was necessary over these cheaper options, "even for minor sprains."
Allstate's complaints lay out patient-by-patient billing histories that follow a consistent pattern. In the Narrow Pharmacy filing, a patient allegedly involved in a car accident was prescribed Lidocaine 5% ointment just three days later - without any documented assessment of whether an over-the-counter product would have worked. Another received the same prescription less than a week after their collision. The filings describe examination reports that were "boilerplate" and "designed to limit the prescribing providers' prescriptions to a predetermined treatment protocol."
The Punjab Rx complaint adds another layer. Allstate alleges the pharmacy billed for overlapping prescriptions - issuing new 30-day supplies before the previous ones would have been used up - "in order to maximize profits without regard for patient care." That complaint also targets Punjab Rx's billing for Diclofenac Sodium 2% solution, a topical anti-inflammatory that the filing says "does not have any proven efficacy or safety in the treatment of musculoskeletal injuries such as sprains or strains." Punjab Rx also allegedly billed $2,721.62 per prescription for the muscle relaxer Cyclobenzaprine Hydrochloride 15mg tablets.
The three pharmacies are distinct businesses with different owners, but Allstate's filings draw common lines. None advertised to the public or maintained a website, according to the complaints - their patient volumes came entirely through clinic referrals. All three allegedly dispensed from a narrow menu of high-margin medications rather than offering a range of products.
The complaints also name specific no-fault clinics as prescribing sources, with Atlantic Medical & Diagnostic P.C. appearing in both the Narrow Pharmacy and Redfern Drugs matters. The Narrow and Redfern complaints reference prior litigation against that clinic by multiple no-fault carriers, including Allstate and State Farm, noting that courts had "granted stays and preliminary injunctions" after finding "serious questions concerning the merits of the fraud allegations," according to the filings.
Two of the three pharmacies - Narrow and Punjab Rx - were formed in late 2023 and registered with the New York State Office of Professions in early 2024. Redfern, which accounts for the largest single claim at more than $233,000, has been registered since 2009.
Each complaint brings three categories of claims: RICO, seeking triple damages; New York common-law fraud, seeking both compensatory and punitive damages; and a request asking the court to confirm Allstate has no obligation to pay the outstanding bills. The combined unpaid claims alone total more than $703,000 - more than $66,000 from Narrow, approximately $335,000 from Redfern, and approximately $302,000 from Punjab Rx, according to the filings.
The billing patterns described here - high-concentration topical ointments prescribed as first-line treatment within days of an accident, filled by pharmacies with no public-facing business, at prices that dwarf over-the-counter alternatives - are exactly the red flags SIU and claims teams working New York no-fault have been trained to look for.
The allegations in all three complaints have not been tested, and no court has ruled on the merits.
