PharMerica settles whistleblower complaint for $31.5 million

posted on:
May 20, 2015

Kurt Niland

PharMerica Corporation has agreed to pay the U.S. $31.5 million to settle allegations contained in a whistleblower’s False Claims Act lawsuit that it overbilled the federal government for drugs it provided to nursing home patients, and routinely dispensed oxycodone and other potent narcotics to individuals without valid prescriptions.

The U.S. Justice Department said that the Louisville, Ky.-based company, which provides pharmaceutical services to nursing homes and other senior care facilities, broke federal laws by submitting false claims to Medicare for narcotics that were improperly dispensed.

According to the complaint, PharMerica allowed unqualified nursing home staff to order narcotics, and pharmacists to dispense them, without confirming that a physician had made a medical judgment as to whether the narcotics were necessary and should be administered to the patient.

PharMerica violated then knowingly caused the submission of false claims to Medicare Part D for improperly dispensed Schedule II drugs.

To settle the allegations, PharMerica entered into two separate agreements with federal prosecutors — one that settles the False Claims Act violations for $23.5 million and another that pays the federal government $8 million in penalties for violating the Controlled Substances Act.

“Pharmacies put patients at risk when they dispense Schedule II narcotics, which have the highest potential for abuse of any prescription drug, without a valid prescription from a physician,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Department of Justice’s Civil Division.

“The legal requirement that narcotics like oxycodone be prescribed by a physician is a crucial patient protection, which is especially important to safeguard the health of the vulnerable elderly and disabled patients in long term care facilities,” said Lamont Pugh III, special agent in the Office of Inspector General, in a statement.

Jennifer Denk, a PharMerica pharmacy operations manager in Pewaukee, Wisconsin, filed the whistleblower complaint in a Wisconsin federal court. She will receive $4.3 million of the total settlement as an award for her role in exposing the alleged fraud and misconduct.

If you have first-hand knowledge of fraud or other wrongdoing, you may be able to file a claim as a whistleblower under the qui tam provisions of the False Claims Act. Whistleblowers receive a percentage of any money the government recovers as a reward for reporting the misconduct. For more information, contact Andrew Brashier at

Source: U.S. Department of Justice

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