After being sued for millions, Iowa pharmacy is fined in counterfeit Ozempic case

An Iowa pharmacy that has been sued by business partners for millions of dollars is now being sanctioned by the state for distributing counterfeit Ozempic.

The Iowa Board of Pharmacy is, however, allowing the company SmartScripts, which has past ties to agribusinessman and former Iowa Board of Regents President Bruce Rastetter, to keep its license.

According to the board, SmartScripts, a state-licensed pharmacy in Washington, Iowa, ordered the popular weight loss drug Ozempic from a wholesale supplier, Pharma Pac, in November 2023. The order was for one case of 1,260 Ozempic “pens” designed to deliver 4 milligrams of the drug.

The board alleges that one week later, on Nov. 28, 2023, SmartScripts received 15 cases, not one case, of the drug from Pharma Pac. On Dec. 7, 2023, SmartScripts allegedly shipped the drugs to Central Pharmacy Management in Lansing, Michigan, which then distributed the product to at least two other pharmacies.

The board alleges that several days later, on Dec. 18, 2023, SmartScripts’ owner, Todd Thompson, received a call from Pharma Pac requesting payment for all 15 cases of the product. For reasons the board has not disclosed or explained, Thompson then quarantined the Ozempic still in his possession and asked the pharmacies that had received the drug from him to refrain from selling any of the product.

On Dec. 21, 2023, the board alleges, Thompson “became aware” the Ozempic he had purchased was counterfeit. According to the board, Thompson failed to report the matter to the Board of Pharmacy until July 2024.

In January 2025, the board charged SmartScripts with knowingly making misleading or untrue representations in the practice of pharmacy; violating a state law in the practice of pharmacy; committing willful or gross negligence; obtaining a fee by fraud or false representations; failure to maintain accurate records as required by law; and obtaining or possessing drugs without lawful authority.

To settle the case, the Board of Pharmacy recently agreed to let SmartScripts keep its license, which will be placed on probationary status for five years. The company will also be required to pay a $25,000 civil penalty, according to board records.

Thompson disputes board’s chronology

Thompson said Thursday the board’s final order in the disciplinary case incorrectly describes the sequence of events in the matter.

He said he first became aware his Ozempic was counterfeit when he was notified by the Food and Drug Administration a few days after he sold the product to Central Pharmacy Management. He said he immediately contacted CPM to inform his buyer of the situation, and said none of the counterfeit drugs reached any patients.

“We cooperated with the FDA and this is still an ongoing investigation,” he said. “I think more than 100 pharmacies nationwide got scammed on this. My violation occurred because I sold to another pharmacy, unaware that they couldn’t sell in that quantity to another pharmacy.”

In court filings, CPM has outlined a different chain of events. CPM is suing SmartScripts, alleging the Iowa company and Thompson “were aware” the drugs it sold to CPM for $132,249 were counterfeit — and, in the alternative, if they were unaware they must have “acted negligently in selling counterfeit drugs without ensuring that they were legitimate.”

CPM also claims that on Dec. 7, 2023, it received its shipment from SmartScripts, and that on Dec. 27, 2023, a special agent with the FDA informed the company the drugs it had purchased from SmartScripts were counterfeit. CPM claims it then reached out to SmartScripts to report the drugs were counterfeit and had been confiscated by the FDA, at which point Thompson stopped returning CPM’s calls.

SmartScripts has denied any wrongdoing and a trial is currently scheduled for Sept. 16, 2025.

SmartScripts sued over COVID-19 test kits

Launched in 2017, SmartScripts claims to be the first telepharmacy in Iowa and delivers pharmaceuticals directly to consumers in all 50 states.

The company has marketed, sold, and delivered medications in part by using automated telemarketing, or robocalls, facilitated by the acquisition of telephone numbers from data brokers. In 2023, the company was the target of a class-action lawsuit for allegedly calling individuals whose names are on the national Do Not Call Registry.

SmartScripts admitted using phone numbers purchased from data brokers but denied deliberately calling individuals on the Do Not Call Registry. Within a few months, the case was settled out of court. A similar lawsuit was filed and settled out of court in 2022.

SmartScripts was also sued last year by a Maryland company called Tiero. That company claimed it was in the business of selling at-home COVID-19 test kits to individuals. Customers would order the kits on Tiero’s website and provide Tiero with their insurance information. Tiero would then purchase the kits from a third party and arrange to have them shipped to the customer.

Because insurers required billing for the kits to be submitted though a licensed pharmacy, Tiero hired SmartScripts to submit those bills to the customers’ insurance companies, with the understanding that SmartScripts, in return for a fee of $5 to $10 per kit, would route the insurance money to Tiero.

“Instead of forwarding the funds as required, SmartScripts improperly retained the funds and wrongfully used them to fund SmartScripts’ business,” the lawsuit alleged. “As part of this scheme, SmartScripts has misappropriated almost $3 million that is rightfully due to Tiero.”

Court records show that in July 2024, SmartScripts agreed to a consent judgment requiring it to pay Tiero $3,052,575 “to avoid the time and cost of litigation without admitting to any allegations.”

Last year, SmartScripts was sued in Missouri state court by KB Evans Drugs. SmartScripts allegedly failed to respond to the lawsuit, resulting in a judgment against the company in the amount of $68,154.

SmartScripts has also been sued in Ohio state court by Capital Wholesale Drug Company. As with the Missouri case, SmartScripts allegedly failed to respond to the Ohio lawsuit, resulting in a judgment against the company in the amount of $65,514.

Last year, SmartScripts was sued in federal court by a Texas-based supplier, the McKesson Corporation, for $2.1 million in allegedly unpaid bills. That lawsuit named the three principal members of SmartScripts as Thompson, Samuel Zoske of Solon and Rastetter.

Thompson said Thursday that Rastetter was an investor in the company many years ago and has not been involved in the business since that time. The McKesson lawsuit was settled out of court in June 2025.

This article first appeared in the Iowa Capital Dispatch.