Sentence upheld for pharmacy exec convicted of distributing bad drugs

The former owner of a Noblesville compounding pharmacy lost an appeal of his conviction and prison sentence related to the distribution of drugs that contained more or less potency than labeled – in some cases with a potency up to 25 times greater than they should have been.

The 7th Circuit Court of Appeals on Thursday affirmed the conviction and 33-month sentence a federal jury in Indianapolis imposed in September 2019 on Paul Elmer, who owned and operated Pharmakon Pharmaceuticals. Elmer was convicted in April 2019 of nine counts of adulterating compounded drugs and one count of conspiracy. He was found not guilty of an additional count of obstruction of justice.

“The evidence before the jury overwhelmingly proved Elmer’s guilt. And the district court’s imposition of a sentence of 33 months’ imprisonment was more than reasonable given the gravity of Elmer’s crimes,” Judge Michael Scudder wrote for the appellate panel in affirming Elmer’s conviction and sentence.

“His pharmacy produced and distributed drugs that Elmer knew were dangerous. Rather than halting manufacturing or recalling past shipments, sales continued and led to the near death of an infant” who was administered over-potent morphine sulfate provided to Community Health Network in Indianapolis, the 7th Circuit noted. Evidence at trial show that from 2014-2016, testing showed 134 instances of under- or over-potent drugs distributed by Pharmakon to customers.

After Community reported incidents to the Food and Drug Administration, Elmer “took a more active role in misleading the agency,” Scudder wrote, but those with knowledge eventually provided documentation of out-of-specification drug tests to the FDA. “Confronted with this evidence, Elmer still refused to recall Pharmakon’s compounded drugs. The FDA responded by issuing a public safety alert and referred the case to the Department of Justice for criminal investigation.”

The 7th Circuit rejected Elmer’s challenges to evidentiary rulings and cooperating witness testimony in the district court. The panel reserved a harsh reply for Elmer’s challenge that his sentence was too harsh, citing the vulnerability of victims and Elmer’s refusal to accept responsibility, among other things.

“The sentence matched the low end of the advisory range and reflected the district court’s application of the mitigating factors required by 18 U.S.C. § 3553(a), including Elmer’s health conditions and his role as the sole caretaker for his wife who also suffers from serious medical conditions,” the panel noted. “The law required no more of the district court. If anything, Elmer’s sentence strikes us as meaningfully lower than the district court could have imposed given the extreme risks, including to infant patients, posed by his offense conduct.”

The case is USA v. Paul Elmer, 19-2890.

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