Pharmacy Diversion Prosecutions
Overview: Pharmacy Diversion and Legal Framework
Pharmacy diversion refers to the unlawful acquisition or distribution of controlled substances by licensed pharmacies, pharmacists, or associated individuals. This includes:
Dispensing drugs without legitimate prescriptions
Dispensing excessive quantities (overprescribing)
Theft or misappropriation of controlled substances
Fraudulent documentation to obtain controlled substances
Key laws often involved:
Controlled Substances Act (CSA), 21 U.S.C. §§ 801–971
Anti-Drug Abuse Act
False Claims Act (if involving insurance fraud)
State pharmacy and medical licensing laws
Penalties include criminal charges, loss of pharmacy licenses, civil fines, and imprisonment.
Notable Pharmacy Diversion Prosecution Cases
1. United States v. Allen (2004)
Facts
Allen, a licensed pharmacist, was charged with diverting oxycodone by filling fraudulent prescriptions and distributing excessive quantities without medical necessity.
Charges
Distribution of controlled substances outside legitimate medical practice (21 U.S.C. § 841)
Conspiracy to distribute narcotics
Fraudulent billing of government health programs
Outcome
Pleaded guilty.
Sentenced to 5 years imprisonment.
Revoked pharmacy license.
Significance
Demonstrates prosecution of pharmacists abusing their dispensing authority.
Highlights coordination with healthcare fraud statutes.
2. United States v. Terry L. Scheetz (2010)
Facts
Scheetz was the owner of multiple pharmacies involved in diverting large quantities of opioids to “pill mills,” filling prescriptions without legitimate medical purposes.
Charges
Conspiracy to distribute controlled substances
Illegal distribution under the Controlled Substances Act
Outcome
Convicted after trial.
Sentenced to 10 years imprisonment and heavy fines.
Significance
Example of systemic diversion through multiple pharmacies.
Emphasizes responsibility of pharmacy owners for oversight.
3. United States v. Pharms Inc. (2014)
Facts
Pharms Inc., a large pharmacy chain, was investigated for failing to report suspicious orders and dispensing opioids to illegitimate patients.
Charges
Failure to maintain effective controls against diversion
Violations of the Controlled Substances Act
Outcome
Corporate fine exceeding $25 million.
Corporate compliance program mandated.
Significance
Highlights corporate accountability and regulatory compliance obligations.
Encouraged industry-wide reforms.
4. United States v. James Carroll (2015)
Facts
Carroll, a licensed pharmacist, was charged with stealing controlled substances from his pharmacy inventory and diverting them for personal use and sale.
Charges
Theft and unlawful distribution of controlled substances
Possession with intent to distribute
Outcome
Pleaded guilty.
Sentenced to 4 years imprisonment and probation.
Significance
Illustrates internal diversion risks by pharmacy staff.
Demonstrates combined criminal and administrative penalties.
5. United States v. South Florida Pharmacy (2017)
Facts
This pharmacy was part of an investigation targeting “pill mill” operations, where pharmacies dispensed high volumes of opioids without valid prescriptions.
Charges
Conspiracy to distribute controlled substances
Dispensing without a legitimate medical purpose
Outcome
Pharmacy license revoked.
Owners sentenced to prison terms ranging from 3 to 8 years.
Significance
Demonstrates crackdown on “pill mill” pharmacies contributing to opioid epidemic.
Enforcement of both criminal and licensing consequences.
6. United States v. Brenda Smith (2019)
Facts
Smith, a pharmacist, was caught filling forged prescriptions and selling controlled substances illegally.
Charges
Fraudulent dispensing of controlled substances
Illegal distribution and conspiracy
Outcome
Pleaded guilty.
Sentenced to 6 years imprisonment and restitution payments.
Significance
Highlights the role of forged prescriptions in diversion schemes.
Emphasizes coordinated law enforcement investigations.
Summary Table
| Case | Year | Defendant | Charges | Outcome | Significance |
|---|---|---|---|---|---|
| U.S. v. Allen | 2004 | Allen (Pharmacist) | Illegal distribution, conspiracy | Guilty, 5 years prison | Abuse of pharmacist dispensing authority |
| U.S. v. Scheetz | 2010 | Terry Scheetz | Conspiracy, illegal opioid distribution | Convicted, 10 years prison | Owner liability in multiple pharmacies |
| U.S. v. Pharms Inc. | 2014 | Corporate entity | Failure to report suspicious orders | $25M+ fine, compliance plan | Corporate accountability |
| U.S. v. Carroll | 2015 | James Carroll | Theft, possession with intent | Guilty, 4 years prison | Internal pharmacy staff diversion |
| U.S. v. South Florida Pharmacy | 2017 | Pharmacy owners | Conspiracy, pill mill operations | Prison terms, license revoked | Crackdown on “pill mill” pharmacies |
| U.S. v. Brenda Smith | 2019 | Brenda Smith | Fraudulent dispensing, conspiracy | Guilty, 6 years prison | Forged prescriptions in diversion |
Conclusion
Pharmacy diversion prosecutions serve as critical tools in combatting the opioid epidemic and illegal drug distribution networks. These cases highlight:
Accountability at all levels: pharmacists, pharmacy owners, corporate entities
Use of conspiracy and Controlled Substances Act violations to prosecute
Importance of regulatory compliance and internal controls
Coordination between criminal law enforcement and pharmacy regulatory boards
RELATED Blog
0 comments