Pennsylvania Federal Judge Rules That PharMerica Can’t Escape FCA Lawsuit

Authors: John Roberts (jroberts@sfmslaw.com) or Alec Berin (aberin@sfmslaw.com)

On February 5th, U.S. District Judge Cynthia M. Rufe of the Eastern District of Pennsylvania denied PharMerica Corporation’s (“PharMerica”) motion to dismiss a complaint that alleges it violated the False Claims Act (“FCA”). The complaint, filed by four relators who were former employees of PharMerica, contends that the nursing home pharmacy defrauded Medicare and Medicaid by submitting reimbursement claims for illegally altered prescriptions. Relators claim that PharMerica altered both the doses and quantities of prescriptions for controlled and noncontrolled substances, and also substituted generic drugs for more expensive brand-name drugs in order to receive greater reimbursement from the government programs.

Relator Lena Sturgeon, a former Executive Vice President with PharMerica, discovered the alteration of prescriptions through the company’s computerized dispensing system. Upon notifying a senior vice president in the company of her findings, Sturgeon alleges that she was ordered to shut down her investigation and was retaliated against when PharMerica reduced her job duties.

In denying PharMerica’s motion to dismiss the relators’ complaint, Judge Rufe noted that relators had provided specific examples of prescriptions that were altered without the consent of the prescribing physician, conduct that a jury could find to be an FCA violation.

This lawsuit is not PharMerica’s first run-in with FCA allegations. In 2015, it paid out a total of $31.5 million to settle FCA claims for allegedly dispensing painkillers without prescriptions, and later paid $9.25 million to resolve kickback allegations in connection with an Abbott Laboratories seizure drug used on nursing home patients.

For a copy of Judge Rufe’s opinion denying PharMerica’s motion to dismiss, please click here.

The relators are represented by Dilworth Paxson LLP and SFMS.

The legal team at SFMS has significant experience litigating FCA matters. SFMS has recovered more than $1 billion for federal and state governments in FCA litigation.  If you have any questions regarding this subject or this posting, please contact John Roberts (jroberts@sfmslaw.com) or Alec Berin (aberin@sfmslaw.com).  We can also be reached toll-free at 877-891-9880.

SFMS is a law firm with offices in California, Connecticut, Florida, New Jersey, New York, and Pennsylvania. SFMS is an active member of International Advisory Group (iag.global), which provides us with the ability to provide our clients with access to excellent legal and accounting resources throughout the globe. For more information about our firm, please visit us at www.sfmslaw.com.

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