American Transit has sued two New York pharmacies, alleging they billed it thousands for pain drugs that have cheap over-the-counter alternatives.
The auto insurer filed both complaints on July 14, 2026, in the Eastern District of New York, and they read almost like copies of each other. The filings describe nearly the same alleged scheme. Each pharmacy, the complaints allege, formed "illicit financial relationships and/or compensation arrangements" with clinics that prescribed pricey topical creams and a short list of oral drugs regardless of what patients needed, then billed American Transit at prices the filings call inflated.
The prices carry the story. One complaint says a pharmacy billed between $1,184.50 and $2,364.00 for topical Diclofenac gel, which the filing says has a lower-strength over-the-counter version, sold as Voltaren, for under $20 for a 100-gram tube. The other alleges its target pharmacy charged as much as $2,149.64 for a single prescription of a combination drug that pairs an anti-inflammatory with a stomach-acid reducer.
Both cases turn on New York's No-fault Law, which lets people injured in car crashes assign their benefits to a provider who then bills the insurer directly. The complaints allege the pharmacies "exploited" that system, pushing high-margin products "irrespective of medical necessity."
The details will feel familiar to any claims handler: assignment-of-benefit forms, NF-3 verification forms, and bills tied to what the complaints call "egregiously high" average wholesale prices. American Transit also alleges the pharmacies never turned over the wholesale invoices that would show what the drugs actually cost, and it points to the standard warning on each claim form flagging any submission "containing any materially false information."
The claimed losses differ by case. American Transit says it is out more than $85,000 to one pharmacy and more than $200,000 to the other. It also wants the court to rule it owes nothing on much larger pools of unpaid claims, both pending and previously denied, described as "more than $480,000.00" in one case and "approximately $1,300,000.00" in the other.
The complaints bring the same four claims: civil RICO, common law fraud, unjust enrichment, and a declaratory judgment. American Transit is seeking triple damages, punitive damages, legal fees, and a jury trial.
These are allegations in two complaints. They have not been tested in court, no court has ruled on any of the claims.
