Pharmacist accused of yearslong drug diversion gives up bid to renew Indiana license

Members of the Indiana Board of Pharmacy had spent months questioning why Knoth remained free to practice long after the alleged diversion was discovered and he was charged with several felonies.

Knoth said he sought to renew the license in an inactive status so he could remain in a state-supported recovery monitoring program that provides random drug testing and “an extra layer of accountability.”

He appeared with attorney Laura Beth Iosue at the board’s Monday meeting, where for the first time he publicly addressed his addiction, treatment and recovery while largely avoiding the underlying allegations in his criminal case.

As of Tuesday, that case remained pending in Delaware Circuit Court. After multiple continuances and rescheduled hearings, Knoth’s next court appearance is set for Nov. 4.

Prosecutors accuse Knoth of stealing more than $121,000 worth of controlled substances from IU Health Ball Memorial Hospital over several years.

The former Muncie pharmacy manager faces five felony counts, including Level 3 felony possession of a narcotic drug weighing more than 28 grams and Level 5 felony theft of property valued at more than $50,000. He is also charged with obtaining a controlled substance by fraud or deceit, unlawful possession of a syringe and forgery, all Level 6 felonies.

Iosue said the defense has been attempting to negotiate a plea agreement with Delaware County prosecutors. She repeatedly advised Knoth not to answer questions that could jeopardize his Fifth Amendment rights.

Hospital records previously presented to the pharmacy board identified more than 32,000 milliliters of hydromorphone, more than 3,300 milliliters of methadone solution, more than 4,000 methadone tablets and smaller amounts of morphine among the reported losses.

The alleged diversion went undetected from November 2020 until July 2024, when a financial review identified irregularities in controlled-substance transactions from the hospital’s main pharmacy. Investigators allege Knoth removed Schedule II narcotics from a secure vault and recorded them as transfers to outpatient clinics that did not use the medications.

Police arrested Knoth in July 2024 after searching his Yorktown home and finding what investigators described as a large quantity of drugs, syringes, hospital pharmacy transaction records and other materials. Formal criminal charges were filed in August 2025.

IU Health said Knoth was immediately terminated when the diversion was discovered.

Addiction and recovery

Knoth told board members Monday that his opioid addiction began with prescription pain medication following surgery.

He said he sought treatment the day after the alleged diversion came to light and later completed detoxification, inpatient treatment and an intensive outpatient program. He also participated in individual counseling for about 18 months and continues to see an addiction specialist.

Knoth said he has not worked as a pharmacist since leaving IU Health. He now works for a tree-removal company where several employees are also in recovery.

Indiana pharmacist charged in ‘astronomical’ drug theft case still holds ‘free and clear’ license

He attends at least two Narcotics Anonymous meetings per week and usually attends three or four, he said. He also has a sponsor and regularly speaks with other people in recovery.

Tracy Traut, a representative of the Indiana Professionals Recovery Program, or IPRP, told the board that Knoth signed a five-year recovery monitoring agreement in September 2024 that runs through September 2029.

Knoth has completed 16 urine drug screens, all of which were negative, Traut said. Two other tests were excused and verified. Although he is required to attend two self-help meetings per month, records show he has averaged 12 to 14.

“He’s been a model monitoring participant, communicative, responsive, and he is compliant,” Traut said.

Still, Knoth said preserving his license was not an attempt to return immediately — or necessarily ever — to pharmacy.

“I don’t plan to,” he said when Iosue asked whether he wanted to practice again. “The main reason I asked for renewal and why when I did renew it, I renewed as inactive, was to stay in IPRP.”

He said he did not want to put his family through the uncertainty of wondering whether he could relapse while working around medications.

“My goal is not to be a pharmacist when I hopefully retire at 65,” Knoth said. “Both my brothers are pharmacists. My daughter’s getting ready to start school to be a pharmacist. I’m glad I haven’t ruined it for them. I take a lot of pride in what pharmacists do and don’t like the negative I brought on it.”

Board presses Knoth on drug use

Board members questioned Knoth about the extent of his addiction, the quantities of drugs involved and whether he had placed hospital patients at risk.

Knoth said a typical injection contained 50 milligrams of Dilaudid, a brand name for hydromorphone. At the height of his addiction, he said, he used as much as 500 milligrams per day.

“Not for the entirety of my addiction, obviously, but at the height,” Knoth said.

The amount allegedly recovered from Knoth’s property still appeared far greater than what his reported daily use would explain. Board member Mark Bunton asked whether hoarding or another behavioral issue was involved.

“I’ve run some incredibly busy stores in my career, and it looks like you had more in your garage than I’ve seen in a store,” Bunton said.

Knoth responded that most of the materials found were empty containers accumulated over years that he had not brought himself to discard. He acknowledged there was “probably” some hoarding behavior.

Knoth said he did not believe at the time that his addiction put patients at risk. In retrospect, he said, he recognizes that it could have.

Bunton said Knoth appeared to have made significant recovery progress, particularly given the quantities of drugs described in the case.

But board member Kate Snedeker questioned whether Knoth had fully accepted responsibility. She pointed to his descriptions of the alleged conduct as something that “happened” to him and his repeated references to being accused.

“I know that there’s some criminal — like he’s trying to protect himself — but that’s just not ownership language,” Snedeker said. “I’m not 100% convinced that he’s where he needs to be.”

License renewal ends in withdrawal

Iosue asked the board to renew Knoth’s license on probation, with a condition expressly prohibiting him from practicing. That arrangement, she argued, would keep Knoth in the monitoring program without posing a risk to the public.

Board members then debated whether licensing fees paid by other pharmacy professionals should subsidize Knoth’s participation when he does not intend to return to work.

Traut ultimately confirmed that Knoth could continue in the program without renewing his license, but he would have to pay $150 per month rather than having the cost covered through the pharmacy board’s contract.

Board member Steven Anderson said Knoth should bear that cost if he wants to remain in monitoring without practicing.

“If his recovery is important to him, he will pay the fee like any other individual in the state of Indiana that’s not a pharmacist that has an addiction issue would pay the fee,” Anderson said.

Other members noted that Knoth paid licensing fees for years and was working as a pharmacist when his addiction developed.

Board member Jason Jablonski cautioned against allowing the significant volume of drugs to obscure the role of addiction. He said another pharmacist whose addiction was detected after a month or two would likely be placed on probation, monitored and potentially allowed to return to work after being cleared.

Knoth’s case continued for years, Jablonski said, in part because the hospital did not detect the diversion.

“He really couldn’t stop until he got caught or he died,” Jablonski said. “That’s the two things that were going to happen. He wasn’t going to stop himself, right?”

Board President Matt Balla eventually moved to deny the renewal, and Snedeker seconded the motion. The vote ended in a 3-3 tie with one member out of the room.

Knoth and Iosue then accepted another option raised during the hearing — voluntarily withdrawing the renewal application and allowing the license to expire without a formal denial on his record.

He could seek reinstatement if he later decides to return to pharmacy, but the board would again review whether he is fit to practice. Members indicated that any future consideration should account for the outcome of his criminal case and completion of his five-year recovery agreement.

“Our obligation is to protect the public,” Jablonski said. “If he withdraws his application, he can’t practice. That’s what we had wanted from the get-go.”

The license issue had frustrated pharmacy board members since at least December. Knoth continued to hold an unrestricted license for more than a year after his arrest because the Indiana Attorney General’s Office had not filed an administrative complaint against him or sought an emergency suspension.

The board separately disciplined IU Health Ball Memorial Hospital for the oversight failures that allowed the alleged diversion to continue undetected.

Regulators voted 3-2 in July to place the hospital pharmacy’s license and controlled substance registration on indefinite probation for at least three years. The settlement also imposed the maximum $44,000 civil fine available under the 44 violations filed by the attorney general and required outside audits, unannounced inspections and additional drug-diversion training.

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