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PharMerica to Pay $31.5 Million for Medicare Fraud

In May 2015, PharMerica Corporation agreed to pay the United States $31.5 million to resolve a medicare fraud whistleblower lawsuit alleging that PharMerica violated the Controlled Substances Act. These allegations claimed that PharMerica dispensed Schedule II controlled drugs without a valid prescription and billed these prescriptions to Medicare in violation of the False Claims Act; these drugs, which were improperly dispensed, cost taxpayers millions of dollars.

PharMerica operates as a pharmacy for long-term care patients. Many of its drugs are controlled substances under Schedule II of the Controlled Substances Act, such as oxycodone and fentanyl, which have a potential for abuse and can cause significant damage to the patient. PharMerica was accused of dispensing these drugs in a widespread scheme across the nation in non-emergency situations and without first obtaining a treating physician’s written prescription. The qui tam law suit also alleged PharMerica enabled nursing home staff to order the drugs without first ascertaining that a physician had documented a medical judgement that the drugs were necessary and should be administered to the patients.

The whistleblower law suit was brought by a pharmacist formerly employed by PharMerica, who saw the wrongful conduct and decided to become a False Claims Act whistleblower. As a whistleblower reward, that pharmacist will receive $4.3 million of the recovery.

The False Claims Act suit was settled as the result of the joint efforts of Department of Justice, the U.S. Attorney Office for the District of Rhode Island, and the U.S. Attorney Office for the Eastern District of Wisconsin