Indiana recovers $316K from settlement of Medicaid fraud kickback scheme

The Indiana Medicaid program has recovered more than $316,000 in funds from a $4.9 million resolution of allegations against PharMerica Inc., one of the nation’s largest long-term care pharmacies, after 14 years of litigation.

The state will receive $316,241 from the $4.9 million recovery, according to the Office of Indiana Attorney General Todd Rokita.

PharMerica, which provides supplies and services to nursing homes and other facilities, was sued in September 2007 by whistleblowers James Banigan and Richard Templin. A lawsuit was filed in federal court against defendants PharMerica, Organon Inc. and Omnicare Inc.

Banigan and Templin alleged 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.

Indiana Medicaid recovered $219,000 from the Organon settlement in August 2014 and $1,330,572 from the Omnicare settlement in May 2017.

The 1^st Circuit Court of Appeals partially reversed a dismissal of the litigation against PharMerica in February 2020.

The resolution announced Wednesday brings the case to a close. Overall, Indiana recovered $1,865,813 from the case.

“This case demonstrates the vital role of persistence in the American legal system,” Rokita said in a statement. “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.”

In 2021, the Indiana attorney general’s Medicaid Fraud Control Unit recovered more than $8 million for the Indiana Medicaid program. Across all divisions, the office recovered $210 million.