CEO Convicted of Defrauding FDA and Distributing Adulterated Controlled Substances

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https://www.justice.gov/opa/pr/former-ceo-convicted-defrauding-food-and-drug-administration-and-distributing-adulterated

A jury yesterday convicted Paul J. Elmer, the former CEO and owner of Pharmakon Pharmaceuticals Inc. (Pharmakon), of conspiracy to defraud the FDA and nine counts of adulterating drugs, the Department of Justice announced today. Pharmakon was a Noblesville, Indiana, drug compounding facility.

Evidence at Elmer’s trial showed that, from 2013 to 2016, Pharmakon routinely shipped compounded drugs at Elmer’s direction to customers without having received laboratory test results that verified the drugs were the strength they were supposed to be. Furthermore, evidence showed that, despite receiving test results showing potency failures, Elmer did not recall the drugs, notify the customer, notify the FDA of the potency failures, or conduct any root cause investigation to determine the cause of the failure. 

FDA consumer safety officers testified about two inspections of Pharmakon they conducted in 2014. One inspection was prompted by Pharmakon’s distribution of 200 percent potent midazolam, a sedative that was used to treat premature infants, to an Indianapolis hospital.  They observed numerous violations of FDA regulations during each inspection, and informed Elmer. But former Pharmakon employees testified that Elmer and Bearden misled and interfered with these first two FDA inspections, in order to prevent the FDA from knowing about the potency failures as well as other aspects of the business. 

According to evidence at trial, in February 2016, the multiple potency failures culminated in Pharmakon’s distribution of 2,460 percent super potent morphine sulfate, an opioid pain medication, to hospitals in Indianapolis and Chicago. Nurses at the Indianapolis hospital administered the morphine, not knowing that it was 2,460 percent super potent, to infants in the pediatric unit.  Three infants suffered adverse effects from the narcotic overdose. One infant needed to be revived through the administration of Naloxone (commonly known as Narcan) and sent by helicopter to a nearby hospital with a neo-natal intensive care unit. These adverse events led to a final FDA inspection in which FDA consumer safety officers testified that they discovered evidence of multiple previous potency failures that had been concealed by Bearden during the first two inspections. Former employees testified that Elmer and Bearden misled and interfered with this final FDA inspection as well.

Elmer’s sentencing date has not been scheduled.

 

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