May 15, 2015

DOJ Catch Of The Week — PharMerica Corporation

By the C|C Whistleblower Lawyer Team

This week’s Department of Justice “catch of the week” goes to PharMerica Corporation, an organization of long-term care pharmacies that dispense medications to residents of nursing homes and skilled nursing facilities across the country.  Yesterday, PharMerica agreed to pay $31.5 million to settle charges it violated the Controlled Substances Act by dispensing Schedule II controlled drugs without a valid prescription and violated the False Claims Act by submitting false claims to Medicare for these improperly dispensed drugs.  See DOJ Press Release.

According to the government, PharMerica pharmacies routinely dispensed Schedule II controlled drugs in non-emergency situations without first obtaining a written prescription from a treating physician.  Schedule II drugs, such as oxycodone and fentanyl, can cause significant harm if used improperly and have a high potential for abuse.  The government claimed PharMerica’s actions violated the Controlled Substances Act by enabling 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.  Under the settlement, PharMerica has agreed to pay $8 million to resolve these allegations.  The government also alleged that PharMerica violated the False Claims Act by knowingly causing the submission of false claims to Medicare Part D for improperly dispensed Schedule II drugs.  PharMerica has agreed to pay $23.5 million to resolve its alleged False Claims Act violations.

In announcing the settlement, the government highlighted its commitment to combating the misuse of controlled substance, particularly when it involves the harm and abuse of our elderly population.  Principal Deputy Assistant Attorney General Benjamin C. Mizer of the DOJ’s Civil Division stressed: “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.”  Special Agent in Charge Lamont Pugh of the U.S. Department of Health and Human Services-Office of Inspector General likewise commented that “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.”

The government’s allegations against PharMerica arose out of whistleblower lawsuit brought by Jennifer Denk, a pharmacist formerly employed by PharMerica, under the qui tam provisions of the False Claims Act.  Ms. Denk will receive a whistleblower award of $4.3 million.

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