U.S. District Judge Cynthia M. Rufe denied Kentucky-based PharMerica’s attempt to dismiss a whistleblower’s allegations that it submitted false claims for government reimbursements for prescriptions. Among other allegations, the whistleblower alleged false requests for payment of both noncontrolled and controlled substances, and for the unlawfully use of a computerized dispensing system to substitute brand-name drugs for generic drugs.

PharMerica Corp. must face False Claims Act allegations it defrauded Medicare and Medicaid by billing for prescriptions with illegally altered dosages and that it retaliated against a whistleblowing former executive by coordinating a campaign to discredit her.

The False Claims Act allows whistleblowers to sue corporations and individuals that defraud the government by means of false claims, records or statements, or through the improper avoidance of an obligation to pay money to the government. Whistleblowers who are successful are eligible for a percentage of the funds recovered by the government as a result of the lawsuit.