PharMerica: Aranesp Payments, Controlled Prescriptions and Depakote

PharMerica False Claims Act settlements in 2015 included a $2.5 million Aranesp promotion settlement, a $31.5 million resolution over controlled-drug dispensing and Medicare claims, and a $9.25 million Depakote kickback settlement. The cases reached different decisions inside the same nursing-home pharmacy business: which drug to recommend, whether to dispense it, and what to bill afterward. For someone who handled manufacturer agreements, prescriptions or claims, that is where the story becomes familiar.

PharMerica supplied medications to residents of nursing homes and skilled nursing facilities. Its consultant pharmacists also reviewed residents’ medical charts and recommended drugs to physicians. That combination put the company in a position to influence both the choice of medication and its delivery. These pharmaceutical fraud cases followed the money through those responsibilities.

Aranesp Payments Reached the Pharmacy Side

PharMerica’s Aranesp settlement resolved its part in a case over alleged improper promotion of an anemia drug manufactured by Amgen. The manufacturer’s earlier settlement concerned alleged kickbacks to pharmacies for switching beneficiaries from a competing anemia drug to Aranesp. The government identified PharMerica among the pharmacy recipients.

The December 23, 2015 announcement placed the pharmacy’s payment alongside Amgen’s $24.9 million settlement in 2013 and Omnicare’s $4.19 million settlement in 2014. The Department of Justice described the combined government recovery in the Aranesp case as just over $31.5 million.

Omnicare’s allegations show the commercial arrangement in more detail. The government alleged that it solicited and received Amgen kickbacks for therapeutic-interchange programs designed to switch Medicaid beneficiaries to Aranesp. Performance-based rebates allegedly depended on market-share or volume thresholds. Other alleged payments included grants and data fees.

The alleged arrangement shows why a pharmacy’s recommendation program can matter as much as the manufacturer’s sales pitch: the pharmacy can turn a commercial target into a request to change a patient’s drug. A rebate tied to market share gives that target a price. A data fee or grant puts the payment under a different heading in the accounts.

The broader pharmacy kickback pattern is a manufacturer paying an intermediary that can influence prescriptions. Paying to influence a recommendation and accepting the payment put different businesses into the same case.

A whistleblower brought the Aranesp case. The government joined the claims against Amgen and Omnicare, while the whistleblower pursued the claims against PharMerica on the government’s behalf.

Controlled Prescriptions Became Medicare Claims

PharMerica’s controlled-drug case concerned allegations of routine dispensing in non-emergency situations without first obtaining a written prescription from a treating physician. The May 14, 2015 settlement announcement described allegations involving Schedule II drugs, including oxycodone and fentanyl, and false claims to Medicare for improperly dispensed drugs.

The alleged failure occurred at the handoff between the nursing home and the pharmacy. Nursing-home staff could order narcotics, and pharmacists could dispense them, without confirming that a physician had decided the drug was necessary and should be given to the resident. The government’s complaint described this as a routine practice at PharMerica pharmacies across the country.

The Justice Department described oxycodone and fentanyl as drugs that can cause significant harm when used improperly and have a high potential for abuse. For elderly and disabled residents, the government described physician prescribing as a crucial patient protection. The alleged shortcut put the pharmacy’s dispensing decision ahead of the check intended to protect the person receiving the drug.

That is a patient-care decision hidden inside a dispensing workflow. An order from the facility moved forward even though, according to the government, the pharmacy had not confirmed the treating physician’s medical judgment. The resident received the drug, and the payment claim followed.

PharMerica agreed to pay $8 million to resolve the Controlled Substances Act allegations. It separately agreed to pay $23.5 million to resolve allegations that it knowingly caused false Medicare Part D claims for the improperly dispensed drugs.

The government’s allegation connected the dispensing decision to the Medicare bill: the missing written prescription was at the pharmacy, while the resulting claim reached a publicly funded drug benefit. A payment record and a dispensing record tell different parts of the same transaction.

The settlement also required a corporate integrity agreement with the Department of Health and Human Services’ Office of Inspector General. PharMerica agreed to substantial internal compliance reforms and independent review of its federal health care program claims for five years.

Can a Pharmacist Be a Whistleblower?

Yes. A pharmacist formerly employed by PharMerica brought the False Claims Act claims in the controlled-drug case. The government took over some of those allegations, and the Justice Department announced a $4.3 million whistleblower share of the settlement.

A pharmacist’s knowledge of the prescription and dispensing process can connect a treatment decision to a Medicare payment. A pharmacist’s view of what happened before a drug left the pharmacy can expose a problem that the payment claim alone does not explain. Manufacturer employees can see the other end of the arrangement: former Abbott employees brought the Depakote cases discussed below.

Depakote Recommendations Had a Manufacturer Behind Them

PharMerica’s Depakote settlement concerned allegations that it solicited and received kickbacks from Abbott Laboratories in exchange for promoting the drug to nursing-home patients. In its October 7, 2015 announcement, the Justice Department described payments allegedly disguised as rebates, educational grants and other financial support.

Nursing homes relied on consultant pharmacists to review residents’ charts at least monthly and recommend medications to physicians. PharMerica employed those pharmacists. That regular review gave the pharmacy a recurring opportunity to influence prescribing, well beyond filling whatever prescription arrived.

The government alleged that Abbott’s payments bought recommendations for Depakote, an anti-epileptic drug. The professional asked to review a resident’s medication worked for the pharmacy allegedly being paid to favor the manufacturer’s product. The resident’s safeguard was, in the government’s account, what the manufacturer was buying. The alleged scheme also left taxpayer-funded health care programs paying for the prescriptions.

This is what pharmaceutical kickbacks through an intermediary can look like inside a nursing home. The manufacturer does not need to put a payment directly into the prescribing physician’s hands. It can pay the business supplying the recommendation that reaches the physician. In PharMerica’s case, the alleged commercial exchange sat behind the language of rebates and education.

The manufacturer-side allegations also concerned what healthcare professionals heard about the drug. The 2012 review Corporate Crime in the Pharmaceutical Industry Is Common, Serious and Repetitive, from the Nordic Cochrane Centre, described state allegations that Abbott made misleading statements about Depakote’s safety, effectiveness, dosing and cost-effectiveness for unapproved uses. It placed those allegations alongside nursing-home marketing and payments to induce prescriptions or promotion. That account points to something a payment ledger alone cannot show: the clinical and financial arguments used to sell the recommendation.

The pharmacy’s role drew attention beyond PharMerica. In October 2016, Omnicare agreed to pay $28.125 million to resolve allegations that it received manufacturer kickbacks for Depakote recommendations. That separate settlement raised the same question about the pharmacy: what did the pharmacy accept in return for promoting the drug?

PharMerica’s settlement allocated approximately $6.75 million to the United States and $2.5 million to Medicaid claims for states choosing to participate. The resolution partially settled allegations in two qui tam cases brought by former Abbott employees, and one whistleblower was to receive $1 million from the federal share.

What a Pharmacy Insider Could See

These cases connect records that describe different sides of the pharmacy business. A manufacturer agreement describes the payment. A recommendation program describes what the pharmacy is expected to promote. A resident’s chart and the prescription record concern the treatment decision. The claim shows what the public program was asked to pay.

In the Aranesp allegations against Omnicare, the commercial measures were unusually clear: market share and volume. In PharMerica’s Depakote allegations, the payment descriptions were rebates, grants and financial support. In its controlled-drug case, the disputed step was physician authorization before dispensing.

That gives employees in different roles different views of the same problem. Someone handling manufacturer support may understand what a payment was intended to buy. A consultant pharmacist may know how a recommendation reached the physician. A dispensing pharmacist may know whether the required prescription was there when the drug went out.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. These PharMerica cases show why an insider’s place in the transaction matters: the prescription, the recommendation and the manufacturer payment can each open a different view of the conduct.

You Know What the Pharmacy Was Asked to Do

If you handled manufacturer support or medication recommendations, or saw drugs dispensed without the physician’s authorization, talk with our whistleblower experts about what you saw. We build the case with you, bring in pharmaceutical fraud whistleblower lawyers who understand nursing-home pharmacy payments and Medicare claims, and stay beside you through the pursuit of a recovery.