What happened: Oscar Health alleges a Florida nonprofit and connected brokers and pharmacies ran a $49 million scheme prescribing unnecessary HIV prevention drugs to members promised free insurance.
Who's involved: Oscar Health (insurer/plaintiff), High Impacto and its wellness center (nonprofit clinic), Boca Pharmacy Group (two New York pharmacies), Go Imhotep and LE VT (two Florida pharmacies), Health Family Insurance (brokerage).
What's at stake: More than $49 million in Descovy prescription claims paid by Oscar Health between January 2025 and August 2026, plus the possibility of triple damages under federal racketeering law.
Why it matters: The alleged scheme exploited the 340B Drug Pricing Program and ACA marketplace enrollment in ways that implicate broker oversight, claims fraud detection, and pharmacy benefit controls.
Where it stands: Complaint filed October 23, 2026, in the Southern District of Florida.
An 86-year-old woman in Texas, recovering from a hip fracture and an infection involving a joint prosthesis, received seven prescriptions for an HIV prevention drug she had no apparent need for, according to a complaint filed by Oscar Health. The prescriptions were filled at a pharmacy in the Bronx - more than a thousand miles from her home.
That was not a one-off error, the insurer says. It was part of the machine.
Oscar Health filed suit on October 23, 2026, in the US District Court for the Southern District of Florida, alleging that a Florida nonprofit clinic, two insurance brokerages, several prescribers, and four pharmacies operated a coordinated scheme to abuse the federal 340B Drug Pricing Program - generating more than $49 million in prescription drug claims in roughly 20 months.
The alleged scheme worked like this, according to the complaint: brokers recruited individuals into Oscar Health's Affordable Care Act plans and promised to pay their premiums. But there was a condition. Members had to agree to receive prescriptions for Descovy, a brand-name HIV prevention medication that costs more than $2,000 a month, the filing says. A generic alternative, Truvada, runs between $30 and $60 a month.
Members were not permitted to choose their pharmacy, according to the complaint. Their Descovy prescriptions were routed to a handful of pharmacies financially connected to the clinic - initially two in the Bronx, later two more in Fort Lauderdale that shared registration addresses with the nonprofit itself.
Because the nonprofit held status as a "covered entity" under the 340B program - a federal initiative that lets qualifying healthcare providers buy certain drugs at steep discounts - it could acquire Descovy far below the retail price, the complaint alleges. The pharmacies then billed Oscar Health at full retail, and the resulting margin was divided among the participants, according to the filing.
The 340B program, established under the Public Health Service Act, is designed to help providers serving low-income patients stretch scarce federal resources. The complaint alleges the defendants turned that structure into a profit engine.
The prescribing patterns described in the complaint raise pointed questions about medical necessity. More than half of the members prescribed Descovy were women, the filing says - even though Descovy's manufacturer states the drug "is not approved for PrEP in females at risk of HIV from vaginal sex" because its effectiveness in that population has not been studied. Nationally, according to the complaint, approximately 89% of Oscar Health's Descovy prescriptions go to male members.
The complaint also alleges that Descovy was prescribed to members in monogamous heterosexual relationships, to elderly members, and to members who reported no apparent HIV risk factors. One married couple in Florida, the filing says, were told they should take the medication because "you never know."
Members reported they did not want or request the drug, did not understand why it had been prescribed, or did not believe they were at meaningful risk, according to the complaint. One member was told, the filing says, that Descovy would protect against sexually transmitted infections generally - a representation the complaint calls false, since Descovy is approved only to reduce the risk of HIV-1 infection.
The complaint describes a recurring three-month cycle: members were contacted, told to get another HIV test, and issued another multi-month Descovy prescription - regardless of whether they were taking the drug or still wanted it. The clinic ordered laboratory tests under false pretenses, the filing alleges, including by representing that members had engaged in "high risk bisexual behavior" or had suspected HIV exposure when those representations were untrue.
One member stopped taking Descovy in December 2025 on the advice of her primary care physician because it was interacting badly with another medication, the complaint says. The prescriptions kept coming. Her Descovy was still being filled as late as August 2026 - eight months after she stopped taking it at her doctor's direction.
Between January 2025 and August 2026, a single prescriber affiliated with the clinic generated more than 23,000 Descovy claims for more than 2,900 Oscar Health members, the complaint says. When Oscar Health blocked that prescriber, only a tiny fraction of those members sought treatment from anyone else. The vast majority simply stopped.
The defendants then shifted approximately 1,800 members to a second prescriber, who began writing the same prescriptions, the filing alleges.
The nonprofit's financial trajectory tells its own story, according to the complaint. Before joining the 340B program, it reported revenue of approximately $93,000. By 2022, that figure was $1,218,000. By 2024, it had reached $3,561,730. By 2025, it was $10,240,401 - with $9,358,745 of that attributed on its tax returns to "funding for the program 340 B."
Over $29 million in allowed Descovy amounts flowed through the two Bronx pharmacies between January 2025 and September 2026, the complaint says, and nearly $20 million more through the two Fort Lauderdale pharmacies linked to the nonprofit.
Oscar Health brings eight legal claims, including fraud, federal racketeering, civil conspiracy, violations of Florida's consumer protection law, interfering with member contracts, and keeping money it was not entitled to. The racketeering claims carry the possibility of triple damages.
The Oscar Health lawsuit is not the first time Florida-based 340B clinics have faced allegations of PrEP prescription fraud. Gilead Sciences, the manufacturer of Descovy, previously won judgments totaling nearly $250 million against networks of Florida clinics, pharmacies, and labs in a similar case brought under federal and Florida racketeering statutes. That litigation, however, was brought by the drug manufacturer over its patient assistance program. The Oscar Health case appears to be among the first major actions in which an insurer uses the same racketeering framework to pursue the entities on the other end of the billing chain.
The case will test whether health insurers can use racketeering and state fraud statutes to claw back payments on claims generated through alleged 340B premium-assistance schemes - a question with direct implications for how claims teams, SIU units, and compliance departments monitor pharmacy benefit utilization tied to federally subsidized drug programs.
The allegations in the complaint have not been tested, and no court has made any findings on the merits.
