PharMerica: The Drugmaker Behind the Pharmacy’s Advice

In the PharMerica Depakote fraud case, PharMerica Corporation agreed to pay $9.25 million to resolve allegations that it accepted kickbacks from drugmaker Abbott Laboratories to promote Depakote to nursing-home residents. The alleged route to the prescription ran through consultant pharmacists, whose chart reviews helped physicians decide which drugs residents should receive. A manufacturer’s commercial interest could arrive at the bedside as a pharmacy’s recommendation.

The Justice Department’s announcement identified rebates, educational grants and other financial support as the alleged disguises for those payments. The complaint went further, describing pharmacy-branded guides and instructions to recommend new prescriptions or switches from competing drugs.

How Consultant Pharmacists Reached the Prescriber

Consultant pharmacists review nursing-home residents’ medical charts at least monthly and recommend drugs to their physicians. That recurring access put PharMerica’s pharmacists in a position to influence prescribing throughout a resident’s care.

The whistleblower’s complaint alleged that a paying manufacturer’s contract shaped those recommendations. After entering such a contract, PharMerica allegedly directed its consultants to recommend more of the manufacturer’s drugs. Physicians could write new prescriptions or agree to let PharMerica switch existing prescriptions.

The complaint also described how Abbott put the pharmacy’s name on its promotional material:

The logo mattered because it changed whose advice the material appeared to carry. Elderly residents with dementia depended on clinical judgment, while the manufacturer allegedly paid to influence it. Residents faced the risk of unnecessary drugs, and public programs such as Medicaid paid the bills.

The California Research Bureau’s 1997 report on health care fraud in California explains how contractual and financial relationships behind the patient-doctor encounter create opportunities for fraud. It describes steering business for a fee as a distinct mechanism. That perspective helps explain this allegation: to understand the recommendation reaching a physician, follow the agreement between the pharmacy and the manufacturer.

Depakote Promotion for Residents With Dementia

The complaint alleged that Abbott targeted agitation and aggression associated with dementia, using treatment guides to promote Depakote for a use the Food and Drug Administration had not approved. It described algorithms that placed Depakote formulations first in the treatment sequence for dementia patients.

According to the complaint, Abbott distributed thousands of pocket guides to its sales force. Representatives used their algorithms during in-service sessions and sales visits to promote Depakote as a first-line treatment for elderly residents with dementia-related agitation and aggression.

The whistleblower alleged that Abbott abandoned plans to seek approval because of concerns about excessive sleepiness and weight loss, but created a long-term-care sales force for those same uses. The concerns stopped the approval plan. They did not stop the sales pitch.

Paperwork was another part of the pitch. The complaint alleged that Abbott promoted Depakote as usable for psychotic disorders without the documentation required for traditional antipsychotics. It also alleged that Abbott pitched Depakote as a way to avoid OBRA requirements for tracking behaviors and maintaining flow records. Less nursing paperwork was part of the sales message.

The PharMerica Settlement and Whistleblower Reward

The Justice Department announced PharMerica’s settlement on October 7, 2015. Former Abbott employees had brought two False Claims Act qui tam cases, and the government joined in part.

The announcement allocated approximately $6.75 million to the United States and $2.5 million to Medicaid claims of participating states. It also announced a $1 million whistleblower reward from the federal share.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

Abbott’s separate $800 million civil settlement in 2012 covered broader manufacturer conduct, including nursing-home promotion and alleged payments to pharmacies.

Omnicare reached its own $28.125 million Depakote settlement in 2016. There, the government alleged that grants, educational funding and rebates linked to drug use included payments through the Re*View program.

The Same Pharmacy Business, Different Exchanges

The Amgen Aranesp case supplies a close comparison: the government alleged that performance or market-share rebates induced long-term-care pharmacies to switch patients to Aranesp, with promotion directed at consultant pharmacists and nursing-home staff. Amgen agreed to pay $24.9 million in its separate settlement.

A separate PharMerica case concerned the price charged to nursing facilities. The whistleblower alleged that below-cost Medicare Part A drugs bought access to more profitable Medicare Part D and Medicaid business, an arrangement described in the court’s account of the swapping allegations. BrightSpring’s annual report records a final settlement in 2024.

For a covered Part A skilled-nursing stay, drugs generally sit inside the facility’s bundled payment, and the facility pays its outside supplier under their contract. A lower pharmacy price saves the facility money on that business. In the swapping allegation, that saving allegedly purchased access to prescriptions paid through other programs. Depakote concerned the manufacturer’s payment for recommendations. Swapping concerned the pharmacy’s pricing to obtain the facility’s business.

What Evidence Is Needed to Prove Fraud?

For an allegation like the PharMerica Depakote case, useful evidence connects manufacturer payments to pharmacy recommendations, prescription changes and government-paid claims. We examine those connections with the insider who knows how the arrangement worked.

A manufacturer agreement, rebate records and pharmacy-branded guides may tell different parts of the story. We work with insiders to connect them to the pharmacist’s monthly reviews, the prescriptions and the claims. The question is how the commercial agreement reached a resident’s treatment.

Those records also identify different decisions. A contracts employee may understand the payment terms. A pharmacist may know who directed a recommendation or switch. A nurse or physician may recognize the treatment guide and the documentation pitch. A billing employee may see the prescription and the claim together. The case takes shape when those accounts and records explain the same transaction.

You Know What Changed the Recommendation

If you saw a manufacturer payment shape pharmacy advice, speak with our whistleblower experts about the agreement and the prescriptions it influenced. We stay with you to build your strongest pharmacy kickback whistleblower case and bring in healthcare fraud whistleblower lawyers who understand these arrangements.