Former Pharmakon exec pleads guilty to 10 criminal charges

The former compliance director for defunct Noblesville-based drug company Pharmakon Pharmaceuticals Inc. has pleaded guilty to multiple criminal charges related to the sale of adulterated drugs, the U.S. Department of Justice announced Wednesday.

Caprice Bearden, 63, of Carmel pleaded guilty in U.S. District Court to one count of conspiracy to defraud the United States and nine misdemeanor counts related to the sale of adulterated drugs.

Bearden and Pharmakon founder Paul Elmer, 64, of Fishers were charged with multiple criminal counts in June after investigators said the company sold compounded painkillers that were as much as 25 times more potent than they should have been.

The drugs were used on numerous hospitalized infants, including one that had such an adverse reaction that it had to be flown by emergency helicopter to a nearby children’s hospital for treatment, the indictment says.

In addition to the conspiracy charge, Bearden pleaded guilty to three misdemeanor counts of introducing an adulterated drug in interstate commerce and six misdemeanor counts of adulterating drugs while held for sale after shipment of a drug component in interstate commerce. 

The conspiracy charge carries a maximum sentence of five years in prison and a fine of $250,000 or twice the gross gain or gross loss from the offense. The misdemeanor charges each carry a maximum punishment of one year in prison and a fine of $100,000 or twice the gross gain or gross loss from the offense.

Chief U.S. District Judge Jane E. Magnus-Stinson accepted Bearden’s plea. A sentencing date has not yet been set.

Elmer pleaded not guilty in his initial court appearance in June. His trial was originally scheduled for August but was moved to April 16, 2018.

Pharmakon compounded drugs at a facility in Noblesville for institutional customers in Indiana and other states. It suspended operations in late 2016 after announcing plans to eliminate 195 of its 215 employees.

The company cited an investigation by the Food & Drug Administration and the loss of a major client as reasons for the layoffs. An unrelated pharmacy business, MedScript Long Term Care Pharmacy, has since taken over the 52,000-square-foot building in the Saxony Corporate Campus.

Federal investigators alleged that from July 2013 through February 2016, Bearden received about 70 potency-test failure notices from companies used by Pharmakon, indicating that drugs such as morphine sulfate and fentanyl were either under- or over-potent. 

The indictment said Bearden discussed the out-of-specification test results with Elmer, a licensed pharmacist, and Elmer determined that Pharmakon should not contact any clients–including hospitals–who received the drugs, nor conduct product recalls before FDA intervention.

The lack of action resulted in several infants being injected with drugs compounded by Pharmakon that were significantly over-potent, investigators said.
As part of her plea agreement, Bearden acknowledged that during 2014 and 2016 FDA inspections, she lied about not receiving any out-of-specification drug-test results. She also acknowledged that she knowingly conspired with Elmer to defraud the United States by obstructing the lawful functions of the FDA.

She also admitted their motives were to prevent a loss of revenue, the DOJ said.

“This defendant distributed serious drugs to hospitals in Indiana and around the country, knowing that the drugs were significantly under or over the strength they were supposed to be,” U.S. Attorney Josh Minkler said in written comments. “She put greed and the reputation of her company ahead of the health and safety of our most vulnerable patient populations.”

Elmer founded Pharmakon in 2003 in Indianapolis, moved it to Carmel in 2008 and then to Noblesville in 2014. It received more than a half-million dollars in tax breaks and other incentives from state and local governments before suspending operations.