Indiana Medicaid Fraud Control Unit Recovers $316,000 in PharMerica Lawsuit

Local Sources - Attorney General Todd Rokita announced Tuesday that his office’s Indiana Medicaid Fraud Control Unit has received $316,241 on behalf of the Indiana Medicaid program as part of a $4.9 million resolution of allegations against PharMerica Inc. The company is one of the nation’s largest long-term care pharmacies, providing supplies and services to nursing homes and other facilities.

This recovery is the culmination of 14 years of litigation under the federal False Claims Act and similar state laws in Indiana and 10 other states. In September 2007, whistleblowers James Banigan and Richard Templin filed a lawsuit in a U.S. District Court against defendants Organon Inc., Omnicare Inc., and PharMerica Inc.

“This case demonstrates the vital role of persistence in the American legal system,” Attorney General Rokita said. “When companies betray the trust placed in them by Medicaid patients and their doctors, justice demands that the companies be held accountable, no matter how long it takes.”

Banigan and Templin alleged that the pharmaceutical company Organon entered into an illegal scheme with PharMerica and Omnicare, another long-term care pharmacy. Under the alleged scheme, Organon would pay kickbacks to PharMerica and Omnicare to incentivize the pharmacies to switch the medications prescribed by patients’ physicians to those sold by Organon, including antidepressants Remeron Tablet and Remeron SolTab.

In August 2014, Organon settled with the federal government and the states, with Indiana Medicaid recovering $219,000. Omnicare settled in May 2017, with Indiana Medicaid recovering $1,330,572.

Litigation against PharMerica continued and included an appeal to the U.S. Court of Appeals for the First Circuit of an April 2018 dismissal of the case obtained by PharMerica. In February 2020, the appeals court partially reversed the dismissal of the action.

This resolution announced today brings the case to an end, with Indiana Medicaid having recovered a total of $1,865,813 in this case.

The Medicaid Fraud Control Unit recovered more than $8 million for the Indiana Medicaid program in 2021. Across all divisions, Attorney General Rokita and his team recovered more than $210 million in 2021 on behalf of Hoosiers.

The Indiana Medicaid Fraud Control Unit receives 75 percent of its funding from the U.S. Department of Health and Human Services under a federal grant. The remaining 25 percent is funded by the State of Indiana.