AHF Files $50 Million Fraud Lawsuit Against Inovalon

Federal complaint exposes pharmacy software vendor for breach of contract, professional negligence, and fraud

AIDS Healthcare Foundation (AHF), which runs 62 pharmacy outlets in 14 states, Washington, DC, and Puerto Rico, filed a complaint on June 4, 2024 in United States District Court for the District of Maryland (Southern Division) (Case No. 8:24-cv-01607-TJS) against software vendor Inovalon for its failure to deliver on services paid for and promised starting in May 2021. The complaint alleges breach of contract, professional negligence, and fraud in the inducement.

Over the past three years, AHF has contracted with Inovalon for its pharmacy software platform ScriptMed which was supposed to be fully implemented by May 2022. To date, Inovalon only has installed a single test instance of the software which has numerous deficiencies at a small AHF pharmacy location.

In October 2023, AHF attempted to engage Inovalon in a dispute resolution based on the evidence that Inovalon had accepted more than $20 million for services not rendered, presenting an itemized list of necessary fixes and a requirement the platform go live by a specified date. In the meantime, AHF requested an account credit for monthly services never received and a partial credit for waste of integral time and resources. Inovalon offered $40,000.

“We tried to work with Inovalon to remedy this situation, even offering more time to implement the promised software in two phases between October 2023 and June 2024, but they refused to comply,” said Ashoke Talukdar, AHF’s Deputy Counsel of Corporate Affairs. “As AHF is based in Los Angeles, CA and Inovalon is headquartered in Bowie, Maryland, we filed this complaint in federal district court.”

AIDS Healthcare Foundation (AHF), the world’s largest HIV/AIDS healthcare organization, provides cutting-edge medicine and advocacy to more than 2 million individuals across 47 countries, including the U.S. and in Africa, Latin America/Caribbean, the Asia/Pacific Region, and Eastern Europe. To learn more about AHF, visit us online at AIDShealth.org, find us on Facebook, follow us on Instagram, Twitter, and TikTok, and subscribe to our AHFter Hours podcast.

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