Whistleblower complaints lead to U.S. lawsuit against national pharmacy company

osha whistle Whistleblower complaints lead to U.S. lawsuit against national pharmacy companyActing on whistleblower allegations, the U.S. government filed a lawsuit against PharMerica Corp., a pharmacy company that provides prescription drugs to nursing homes and other long-term care facilities, for allegedly dispensing controlled substances without valid prescriptions and knowingly causing false claims for those drugs to be submitted to Medicare.

The lawsuit, filed in the U.S. District Court for the eastern District of Wisconsin, alleges PharMerica violated the False Claims Act and the Controlled Substances Act by illegally dispensing the drugs, including potent Schedule II drugs such as oxycodone and fentanyl, which can cause serious harm or death if used improperly. Schedule II drugs also have the highest potential for addiction and abuse of any prescription drugs.

PharMerica services approximately 300,000 residents of long-term care facilities and fills approximately 40 million prescriptions annually.

According to the complaint, PharMerica routinely dispensed Schedule II controlled drugs in non-emergency situations without obtaining written prescriptions from the treating physician. In this arrangement, nursing home staff allegedly ordered narcotics without the consent and guidance of a physician and PharMerica dispensed them. Medicare unknowingly footed the bill for the illegally dispensed drugs.

Jennifer Denk, a former PharMerica employee, initiated the lawsuit when she filed her complaint against the company in July 2009.  Ms. Denk filed the complaint under the qui tam provisions of the False Claims Act, which permit parties known as “relators” to sue on behalf of the U.S. when they believe that defendants submitted false claims for government funds.

The False Claims Act allows the government to intervene in whistleblower lawsuits and recover up to three times its damages plus civil penalties. In return, the whistleblower shares in the recovery, usually upward of 20 percent.

Ms. Denk’s complaint was later consolidated with another whistleblower complaint filed in May 2010 by Eric Beeders and Lesa Martino.

“The complaint that we are filing today reflects the abiding commitment of the Justice Department to the qui tam process, encouraging people with information about alleged fraud and abuse to report it in a timely and effective manner,” said James L. Santelle, U.S. Attorney for the Eastern District of Wisconsin.

“The False Claims Act allegations in this case, which involve Medicare billings for the dispensing of Schedule II controlled substances absent valid prescriptions, are precisely the type of allegations that our office and the Civil Division examine carefully, investigate fully, and prosecute vigorously—to protect taxpayer monies and to promote the delivery of professional health care to all of our constituents,” Mr. Santelle added.


U.S Department of Justice