Iowa’s first telepharmacy sued by a Texas supplier for $2.1 million

An Iowa pharmaceutical company with ties to Iowa businessman and former Board of Regents president Bruce Rastetter is being sued for nonpayment of $2.1 million worth of pharmaceuticals.

Editor's note: Bruce Rastetter is also a principal of Summit Agriculture and Summit Carbon Solutions.

A Texas company, the McKesson Corp., is suing SmartScripts of Washington, Iowa, in U.S. District Court. Launched in 2017, SmartScripts claims to be the first telepharmacy in Iowa and now delivers pharmaceuticals directly to consumers in all 50 states.

SmartScripts is a limited liability company whose principal officers are not publicly disclosed, but the lawsuit alleges that SmartScripts’ member directors include Rastetter, Todd R. Thompson of Iowa City, and Samuel Zoske of Solon. In addition to SmartScripts, the lawsuit names as defendants Thompson & Thompson Long-Term Care of Washington, Iowa, as well as Thompson and Zoske individually.

The lawsuit alleges that in March 2015, SmartScripts applied for credit with McKesson for the purchase of pharmaceutical products from the Texas company. At the same time, Thompson and Zoske allegedly agreed to act as guarantors on the deal, binding them to pay off any debt incurred by SmartScripts through its pharmaceutical purchases.

In April 2017, according to the lawsuit, McKesson entered into a separate agreement with SmartScripts and Thompson and Thompson Long-Term Care in which McKesson agreed to sell pharmaceutical products to both Iowa companies.

As a result, McKesson claims, it sold and delivered pharmaceutical products purchased by SmartScripts. The lawsuit alleges that at least $2,174,191 is now owed by SmartScripts and Thompson and Thompson Long-Term Care to McKesson and that the Iowa companies are refusing to pay.

According to the lawsuit, SmartScripts, in an effort to show it would pay off its debt while continuing to procure additional pharmaceuticals from McKesson, promised in 2022 that it would pay McKesson $6.3 million, plus interest. The deal allegedly called for SmartScripts to make 104 consecutive weekly installment payments of $60,809 to McKesson, after which it would then pay off any remaining debt.

As part of the deal, SmartScripts allegedly gave McKesson, as collateral, a security interest in all of SmartScripts’ personal property. SmartScripts has since defaulted on that arrangement, the lawsuit claims, leaving an unpaid principal balance in the amount of $2.1 million. Thompson and Zoske have also failed to pay, according to the lawsuit.

The lawsuit seeks payment of the full amount and alleges breach of contract and unjust enrichment.

SmartScript markets, sells and delivers medications directly to consumers, 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.

Rastetter, Zoske and Thompson could not be reached for comment. The defendants have yet to file a response to the lawsuit.

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