Pharmacy owner sentenced to 33 months for making over-potent drugs

The former owner and CEO of Pharmakon Pharmaceuticals Inc. in Noblesville was sentenced Wednesday to 33 months in prison for manufacturing and selling drugs that were as much as 25 times more potent than they should have been.

Paul Elmer, 68, of Fishers, was sentenced in U.S. District Court in Indianapolis—six months after a jury found him 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.

“We will never know how many victims there were,” Judge James R. Sweeney said. “We know there were pregnant women, elderly and children.”

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. Compounding drugs is a highly technical practice in which a pharmacist in laboratory conditions mixes ingredients to produce medicines.

In one case in 2016, Pharmakon distributed an opiate painkiller called 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 was taken by emergency helicopter to Riley Hospital for Children after suffering a severe reaction.

Elmer choked back tears as he told the court he was remorseful. “I’m thankful no one was severely injured,” he said.

He said he was unaware of safety problems at his company, and if he he had known of them, “I would have taken swift action.”

But prosecutors said that Elmer not only knew, but covered up the issues, and told some employees to lie during the investigation.

“He made a choice to play fast and loose with other people’s lives to make money,” Assistant U.S. Attorney Cindy Cho said.

From July 2013 through February 2016, the company received about 70 potency-test failure notices from outside testers, alerting them that morphine sulfate and fentanyl were either under- or over-potent.

Prosecutors asked for Elmer to be sentenced to 46 months. His defense lawyer, Richard Kammen, asked for 13 months, pointing out that Elmer’s wife needs care, as she has been diagnosed with cancer and severe depression.

“How much (prison time) is enough to protect society from a 68-year-old man with declining health, who has never been in trouble, whose company is out of business, and has a very ill wife to support?” Kammen said.

Prosecutors asked for Elmer to be remanded immediately to the U.S. Marshal, but Judge Sweeney allowed Elmer to surrender himself later.

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

A key witness was Caprice R. Bearden, former compliance officer of Pharmakon. Prosecutors said Bearden and Elmer jointly engaged in a pattern of lies and deception, with the goal of keeping the business running without interruptions to operations or revenue. The defense called Bearden a “rogue employee” who was responsible for many of the problems.

Bearden pleaded guilty in 2017 to one count of conspiracy and nine misdemeanor counts related to the sale of adulterated drugs, and was sentenced to five months.

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.