Pharmacy owner convicted of making over-potent drugs sold to hospitals

The former owner and CEO of Pharmakon Pharmaceuticals in Noblesville has been found guilty of manufacturing and selling drugs that were as much as 25 times more potent than they should have been.

A federal jury in Indianapolis on Wednesday evening found Paul Elmer, 66, of Fishers, guilty 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.

Prosecutors said Elmer, a registered pharmacist who founded Pharmakon 16 years ago and shut it down three years ago, engaged in a pattern of lies and deception, even after employees and outside testers warned that the drugs the company sent to hospitals were too strong or too weak.

Pharmakon compounded drugs — including morphine and fentanyl — at its Noblesville facility and sent them to hospitals all over the country, including Community Health Network in Indiana and Walter Reed National Military Medical Center in Washington, D.C. Many of its hospital customers used the drugs to treat infants, the elderly and veterans. Compounding drugs is a highly technical practice in which a pharmacist mixes ingredients to produce medicines.

Prosecutors said that from July 2013 through February 2016, the company received about 70 potency-test failure notices, indicating that drugs such as morphine sulfate and fentanyl were either under- or over-potent. 

In one case in 2016, Pharmakon distributed the opiate painkiller morphine sulfate at a potency level of 2,460 percent to two hospitals in Indiana and Illinois. Three infants from the Indiana hospital later received the medicine, and one had such a severe reaction that it was taken by emergency helicopter to Riley Hospital for Children.

“What the government proved in this case is that Mr. Elmer knew that the powerful drugs they were manufacturing were manufactured improperly,” U.S. Attorney Josh Minkler said in an interview Thursday. “He took steps to hide that because of profit. His actions put patients’ lives at risk.”

He added: “Not once, not twice, but 70 times Pharmakon was told that the drugs they were making were stronger or weaker than what the label said. And each time, Paul Elmer, who is a licensed pharmacist, determined it wasn’t worth telling the hospitals, the doctors or the patients that this was occurring.”

Elmer’s attorney, Richard Kammen, said he was disappointed in the verdict and was considering an appeal. He said Elmer was unfairly held responsible for the actions of a “rogue employee,” Caprice Bearden, the company’s former compliance officer. Bearden pleaded guilty in 2017 to one count of conspiracy and nine misdemeanor counts related to the sale of adulterated drugs.

A sentencing date for Elmer has not yet been set. He remains under home confinement, the prosecutor’s office said. Assistant U.S. Attorney Cindy Cho was the lead prosecutor on the case.

Prosecutors called about a dozen witnesses, including former Pharmakon employees, some of whom testified Elmer knew the company was shipping dangerous drugs to hospitals.

Elmer founded Pharmakon in 2003 in Indianapolis, moved it to Carmel in 2008 and then to Noblesville in 2014. It received more than $500,000 in tax breaks and other incentives from state and local governments. Pharmakon closed its doors in 2016.