PharMerica: Controlled Prescriptions, Aranesp and Depakote

PharMerica pharmacy cases include a $31.5 million civil settlement over alleged dispensing of controlled drugs without valid prescriptions and false Medicare claims, alongside separate Depakote and Aranesp settlements. The cases reach into different parts of the pharmacy: who authorized a narcotic, who influenced a drug recommendation, and who paid for it. A pharmacist, billing employee or manufacturer insider may recognize the transaction long before seeing the whole case.

PharMerica dispenses medications to residents of nursing homes and skilled nursing facilities. Its institutional business places the pharmacy inside an ongoing relationship with the facility.

A consultant pharmacist can influence a prescription without writing it. Nursing homes rely on those pharmacists to review residents’ medical charts at least monthly and recommend changes to the treating physician. The controlled-prescription case concerned the authority to dispense. The manufacturer-payment cases concerned the financial interests behind recommendations.

Controlled Prescriptions and Medicare Part D Claims

The controlled-prescription settlement addressed allegations that PharMerica dispensed Schedule II drugs without valid physician prescriptions and knowingly caused false Medicare Part D claims for them. In its May 14, 2015 announcement, the Department of Justice described pharmacies operating across the country, with drugs including oxycodone and fentanyl.

The government alleged that PharMerica routinely dispensed these drugs in non-emergency situations without first obtaining a written prescription from a treating physician. Nursing-home staff could order the narcotics, and pharmacists could dispense them, without confirming that a physician had decided the resident needed them.

That is the operational point behind the invalid controlled-prescription allegations. A request from a nursing home moved through the pharmacy and became a government bill, allegedly without the physician’s medical judgment that should have supported the dispensing. We see the absurdity in that allegation: no confirmed medical decision behind the narcotic, but a bill for taxpayers anyway.

The settlement allocated $8 million to the Controlled Substances Act allegations and $23.5 million to the False Claims Act allegations.

A former PharMerica pharmacist brought the whistleblower claims. The government took over part of the case, and the announcement identified a $4.3 million whistleblower award.

The settlement followed a coordinated effort by the Justice Department’s Civil Division, the U.S. Attorney’s Offices for the Eastern District of Wisconsin and the District of Rhode Island, the Department of Health and Human Services’ Office of Inspector General, and the Drug Enforcement Administration.

For someone inside a pharmacy, the case turns on records with different jobs. The facility request shows what staff asked for. The physician’s prescription supplies the medical authorization. Dispensing records show what the pharmacy supplied, while the claim shows what it asked Medicare to pay. We connect those events to the people who understood how the process worked.

Depakote and the Price of a Recommendation

PharMerica agreed to pay $9.25 million to resolve allegations that it solicited and received kickbacks from Abbott Laboratories in exchange for promoting Depakote to nursing-home patients. The Justice Department’s October 7, 2015 announcement identified the alleged disguises: rebates, educational grants and other financial support.

Depakote is an anti-epileptic drug. The alleged arrangement bought recommendations that physicians prescribe it to nursing-home residents. PharMerica’s consultant pharmacists occupied the point where a manufacturer’s commercial interest could reach a resident’s medical chart and then the treating physician.

We see the conflict plainly: the pharmacy was being relied on to review the resident’s medicines while allegedly accepting manufacturer payments to recommend one of them. The resident needed independent judgment. The manufacturer wanted a prescription.

This is the long-term-care pharmacy kickback mechanism in its recommendation form. The payment flowed from the manufacturer to the pharmacy. The influence flowed toward the physician. The government alleged that the money purchased that influence, even when the payment carried an educational or rebate label.

Two former Abbott employees brought the underlying whistleblower lawsuits, and the government took over part of the case. That matters to someone working on the manufacturer side: knowledge of the payments and their purpose can expose an arrangement involving a pharmacy’s recommendations.

The release reported a $1 million award to one whistleblower from the federal share. The Department of Health and Human Services’ Office of Inspector General jointly handled the matter with federal and state enforcement offices.

Aranesp and the Business of Switching Drugs

PharMerica’s Aranesp settlement was a separate $2.5 million resolution, announced on December 23, 2015. It concerned the promotion of Amgen’s anemia drug through long-term-care pharmacies. The whistleblower pursued the case against PharMerica after the government intervened against Amgen and Omnicare.

The whistleblower’s complaint described how therapeutic interchange, switching a patient from one drug to another, allegedly became a pharmacy sales program. A PharMerica internal memo quoted in the complaint presented the conversion from Procrit to Aranesp this way:

The memo put pharmacy gross margin at the front of the project and enlisted both dispensing and consultant pharmacists. The complaint then alleged the machinery used to make the switches happen: regional scorecards tracking success, employee bonuses tied to therapeutic interchange, and direct solicitations to nursing-home physicians.

According to the complaint, PharMerica staffed a Houston call center called the Clinical HUB with nurses and other healthcare personnel. Their task was to encourage physicians to switch patients from Procrit to Aranesp through phone calls and mailed letters. The alleged sales effort reached the prescriber through both the consultant pharmacist and a separate outreach operation.

The scorecards matter because they connect a clinical recommendation to the way the business measured and rewarded its employees. A person who saw only the final prescription might miss that connection. Someone who worked with the targets, bonuses or call center could explain what the pharmacy was asking its staff to accomplish.

Manufacturer Payments and Consultant Pressure

The government’s allegations in Amgen’s separate settlement agreement describe payments to PharMerica, Omnicare and Kindred intended to induce Aranesp recommendations. The alleged forms included market-share and volume rebates, grants, speaker fees, consulting services and purchases of unnecessary data.

That agreement also alleged that Amgen encouraged switching programs to identify patients taking a competing drug and move them to Aranesp. It accused Amgen of urging the pharmacies to pressure consultant pharmacists to recommend Aranesp for patients without a physician diagnosis, prior history or outward symptoms of anemia associated with chronic renal failure. The government alleged that this conduct caused false claims to Medicare, Medicaid and other federal health care programs.

These allegations explain the commercial pressure surrounding the pharmacy recommendations.

The complaint also alleged that Amgen rewarded sales employees for getting nursing homes to adopt anemia protocols, using a checklist created with PharMerica. Employees earned credit for the facility’s beds, with bonuses for the highest point totals. Getting a facility to adopt the protocol became a sales achievement in its own right.

Omnicare faced a similar drug-switching allegation in the complaint. Nursing homes it served allegedly complained about repeated switches between Procrit and Aranesp driven by competing manufacturers’ rebates. In that account, even a drug choice already made for the resident could become another sales opportunity.

Facility Discounts for Other Business

A separate PharMerica case alleged that the pharmacy swapped discounted facility rates for other business. The court’s account of the allegation identifies the per-diem rates as a crucial part of that arrangement.

Here the alleged inducement ran from the pharmacy to the facility, rather than from a manufacturer to the pharmacy. Someone who knew the actual rates and the business expected in return could explain what the discount was meant to buy.

Houston Recordkeeping and the DEA Inspection

The separate Houston recordkeeping matter resulted in a $778,000 civil penalty obligation under the Controlled Substances Act. The government’s announcement described allegations arising from a Drug Enforcement Administration inspection in June 2024 at PharMerica’s Post Oak Road pharmacy.

The alleged failures were specific: incomplete or inaccurate records for all eight controlled substances audited, dispensing records that were not readily retrievable for seven of the eight, and incomplete transfer records for collected controlled substances.

What a Pharmacy Insider Can Connect

These PharMerica cases show why the prescription, the recommendation and the payment each need their own explanation. In the controlled-prescription case, we examine the authorization behind the dispensing and the Medicare claim that followed. In the manufacturer-payment cases, we examine what the pharmacy received, what employees were encouraged to recommend, and how those recommendations reached physicians.

Different employees see different connections. A dispensing pharmacist may know how facility requests were handled. A consultant may know what appeared in the medication review and what management expected. An employee working with manufacturer contracts, scorecards or physician outreach may know how a drug switch was measured and rewarded.

Billing records add another view. The claim, the pharmacy’s final payment and the underlying dispensing records describe different events. In cases involving prescriptions never supplied, that separation exposes the gap between payment and delivery. Here, it helps us connect the alleged prescribing or recommendation problem to the government money involved.

PharMerica Whistleblower Rewards

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

You Know What Drove the Prescription

If you saw a facility request replace a physician’s prescription, or a drug recommendation tied to a rebate or bonus, speak with our whistleblower experts about what happened inside the pharmacy. We work with you to build the case around those decisions and bring in pharmacy fraud whistleblower lawyers who understand institutional dispensing and manufacturer payments. We stay beside you as your knowledge becomes a case for recovering public money.