Overview
Allstate has filed three federal lawsuits against New York pharmacies, alleging they used similar arrangements with no-fault medical clinics to bill hundreds of thousands of dollars for expensive prescription pain treatments.
The complaints were filed Sept. 30, 2026, in the U.S. District Court for the Eastern District of New York against Narrow Pharmacy Inc. in Brooklyn, Redfern Drugs Inc. in Far Rockaway and Punjab Rx Pharmacy Inc. in South Richmond Hill.
The plaintiffs are Allstate Insurance Company, Allstate Fire and Casualty Insurance Company, Allstate Indemnity Company and Allstate Property and Casualty Insurance Company.
Across the three cases, Allstate alleges the pharmacies participated in schemes designed to exploit New York’s no-fault auto insurance system.
The insurer is seeking to recover more than $414,000 it says was already paid on fraudulent claims, along with treble damages under the federal Racketeer Influenced and Corrupt Organizations Act, or RICO. It also wants the court to declare that more than $703,000 in outstanding bills are not payable.
The complaints have not been decided, and the allegations against the pharmacies remain unproven.
The alleged billing model
Allstate describes a similar arrangement in each complaint. The insurer alleges the pharmacies entered illicit financial or compensation relationships with no-fault medical clinics in the New York metropolitan area, which treated patients following automobile accidents.
According to the filings, those clinics regularly prescribed Lidocaine 5% ointment and several oral medications as part of a predetermined treatment approach.
Allstate alleges the prescriptions were issued without adequate consideration of whether patients needed the drugs or whether cheaper treatments were available.
The pharmacies then filled the prescriptions and submitted bills directly to Allstate under New York’s no-fault insurance system, the complaints allege.
The amounts varied by pharmacy. Narrow Pharmacy allegedly billed $1,222 for 200 grams of Lidocaine 5% ointment and as much as $1,527.50 for 250 grams. Redfern Drugs allegedly charged up to $1,920.90 for 250 grams, while Punjab Rx allegedly billed $1,907.50 for the same quantity.
Allstate compares those charges with over-the-counter products containing 4% lidocaine, including Aspercreme, Icy Hot and Bengay. Similar products retail for less than $20 for a 133-gram tube, according to the complaints.
The insurer alleges prescribing records did not explain why the 5% prescription product was medically necessary instead of a cheaper over-the-counter option, including in cases involving minor sprains.
Prescriptions within days of accidents
The complaints include individual patient histories that Allstate says show repeated prescribing and billing patterns.
In the Narrow Pharmacy case, one patient was allegedly prescribed Lidocaine 5% ointment three days after a car accident. Allstate says the medical records did not document an assessment of whether an over-the-counter treatment would have been sufficient. Another patient allegedly received the same medication less than a week after a collision.
Allstate describes some examination reports as boilerplate records designed around predetermined treatment protocols. The insurer alleges those records were used to support recurring prescriptions for the same group of medications rather than treatment decisions based on individual patient needs.
The Punjab Rx complaint includes allegations involving overlapping prescriptions. Allstate says the pharmacy dispensed new 30-day supplies before earlier supplies should have been exhausted, which the insurer alleges was intended to increase billing without regard to patient care.
Punjab Rx is also accused of billing for Diclofenac Sodium 2% solution. The complaint states that the topical anti-inflammatory does not have proven efficacy or safety for treating musculoskeletal injuries such as sprains and strains.
Allstate also alleges Punjab Rx billed $2,721.62 per prescription for Cyclobenzaprine Hydrochloride 15 mg tablets.
Connections to no-fault clinics
Narrow Pharmacy, Redfern Drugs and Punjab Rx are separate businesses with different ownership, but Allstate points to several similarities in their operations.
According to the complaints, none of the three pharmacies advertised to the general public or maintained a website. Allstate alleges their patient volume instead came through referrals from no-fault medical clinics, and that the pharmacies concentrated on a limited group of higher-priced medications.
Some prescribing clinics also appear across more than one lawsuit. Atlantic Medical & Diagnostic P.C., for example, is identified in both the Narrow Pharmacy and Redfern Drugs complaints.
Those two filings refer to earlier litigation brought against Atlantic Medical & Diagnostic by multiple no-fault insurers, including Allstate and State Farm. According to the complaints, courts in those matters granted stays and preliminary injunctions after finding serious questions concerning the merits of fraud allegations.
Allstate also points to the operating histories of the pharmacies. Narrow Pharmacy and Punjab Rx were formed in late 2023 and registered with the New York State Office of Professions in early 2024, according to the complaints. Redfern has been registered since 2009.
Redfern accounts for the largest amount Allstate says it has already paid, at more than $233,000.
Allstate seeks RICO damages and unpaid claims relief
Each lawsuit includes claims under RICO and New York common-law fraud. Allstate is seeking treble damages under the federal racketeering law, along with compensatory and punitive damages on the state fraud claims.
The insurer is also asking the court to rule that it has no obligation to pay pending claims submitted by the defendants.
Those outstanding bills total more than $703,000 across the three lawsuits. Narrow Pharmacy accounts for more than $66,000, Redfern Drugs approximately $335,000 and Punjab Rx approximately $302,000, according to the complaints.
The three cases are part of a broader group of recent Allstate RICO filings against pharmacy businesses in the Eastern District of New York. Court records show the insurer filed separate racketeering cases against several other pharmacies during the final days of September.
For Narrow Pharmacy, Redfern Drugs and Punjab Rx, the litigation remains at an early stage. Allstate’s allegations concerning kickbacks, prescribing practices, medical necessity and billing have not been tested at trial, and no court has ruled on the merits of the three complaints.
