Indiana Pharmacy Board Rejects Hospital Deal Over Drug Diversion Scheme

IU Health Ball Memorial Hospital's pharmacy license renewed despite board's concerns over undetected thefts

Apr. 14, 2026 at 1:56pm

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An extreme close-up of a shattered glass vial reflecting a harsh, direct camera flash, conceptually representing the investigation into a large-scale drug diversion case at an Indiana hospital.A shattered vial of diverted opioids highlights the scale of a yearslong drug theft scheme at an Indiana hospital.Muncie Today

The Indiana Board of Pharmacy rejected a proposed $44,000 settlement with Indiana University Health Ball Memorial Hospital over a yearslong drug diversion scheme by a former pharmacist, saying the penalties were insufficient. However, the board still renewed the hospital's pharmacy license, allowing it to continue operating while the disciplinary case moves forward.

Why it matters

The case highlights concerns about how long the diversion went undetected and whether the proposed penalties matched the scope of the alleged thefts, which totaled over $120,000 in diverted opioids. Regulators questioned whether hospital leadership should face additional training requirements to prevent future drug diversions.

The details

Former hospital pharmacist Christopher Knoth allegedly stole nearly 317,000 milligrams of hydromorphone, 41,390 milligrams of methadone, and 290 milligrams of morphine over a 44-month period. The hospital disclosed the total value of the diverted drugs was $121,893. Under the rejected settlement, the hospital would have faced 44 counts with a $1,000 fine per count, the maximum allowed. But the board said the penalty was insufficient given the scale and duration of the misconduct.

  • The drug diversion occurred between November 2020 and July 2024.
  • Knoth was arrested in July 2024, but formal charges were not filed until August 2025.
  • The next status hearing in Knoth's criminal case is scheduled for May 6.

The players

Indiana Board of Pharmacy

The state regulatory body that oversees pharmacy licenses and disciplinary actions.

Indiana University Health Ball Memorial Hospital

A hospital in Muncie, Indiana that was the subject of the drug diversion investigation and disciplinary case.

Christopher Knoth

A former pharmacist at IU Health Ball Memorial Hospital who is accused of stealing large quantities of opioids from the hospital's pharmacy over a multi-year period.

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What they’re saying

“This is $27 per life. I think if this was going to be a settlement that we wanted to approve, it should have involved something that involved the community — and not the minimum.”

— Matt Balla, Board President, Indiana Board of Pharmacy

“I don't think it goes far enough. You know, two million (morphine milligram equivalents) were diverted, probably at least a million dollars in street value was out there being sold and pedaled on the streets.”

— Jason Jablonski, Board Member, Indiana Board of Pharmacy

What’s next

The Indiana Board of Pharmacy has set the case for a full administrative hearing, likely in July, to determine further disciplinary action against IU Health Ball Memorial Hospital.

The takeaway

This case highlights the challenges regulators face in holding hospitals accountable for large-scale drug diversions that go undetected for years, as well as questions about whether proposed penalties are sufficient to address the scope of the misconduct and its potential impact on the community.