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PharMerica whistleblower collects $4.3 million

A pharmacist from Waukesha, Wisconsin who was fired after she told federal authorities her employer might be dispensing dangerous drugs without a doctor’s prescription was awarded $4.3 million as part of a False Claims Act settlement.

In 2009, Jennifer Denk first told her bosses at PharMerica the pharmacy was using her license to dispense OxyContin and fentanyl without adequate control. She also believed PharMerica was falsely billing the government for some prescriptions.

When the PharMerica executives didn’t take any action, Denk contacted federal authorities.

After federal agents raided PharMerica’s Pewaukee, Wisconsin plant, the company fired Denk.

She filed a qui tam complaint under the whislteblower provisions of the False Claims Act. The government intervened and took over the case.

Last week, PharMerica agreed to pay the United States $31.5 million to resolve the lawsuit. Denk’s share of the settlement is $4.3 million.

PharMerica allegedly violated the Controlled Substances Act by dispensing Schedule II controlled drugs without a valid prescription and violated the False Claims Act by submitting false claims to Medicare for improperly dispensed drugs, the Justice Department said.

Under the settlement, the company agreed to pay $8 million to resolve the Controlled Substances Act allegations. And it agreed to pay $23.5 million to resolve its alleged False Claims Act violations.

PharMerica is a long-term care pharmacy that dispenses medications to residents of long-term care facilities, including nursing homes and skilled nursing facilities.

The whistleblower provisions of the False Claims Act allow private parties to sue on behalf of the United States and share in any recovery. The FCA permits the United States to intervene and take over the lawsuit, as it did in this case.

As part of the settlement, PharMerica agreed to enter into a corporate integrity agreement with the U.S. Department of Health and Human Services-Office of Inspector General. The agreement obligates PharMerica to make “substantial internal compliance reforms and to submit federal health care program claims for an independent review for the next five years.”

The DOJ said the claims resolved by the settlement are allegations only and there has been no determination of liability.

The case is captioned U.S. ex rel. Denk v. PharMerica Corp., No. 09-cv-720 (E.D. Wis.).

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.

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