Omnicare to pay more than $28 million to settle kickback charges
October 18, 2016
The nation’s largest nursing home pharmacy, Omnicare Inc., has agreed to pay $28.125 million to resolve charges that it received kickbacks from Abbott Laboratories in exchange for promoting the prescription drug, Depakote, for nursing home patients.
“Every day, elderly nursing home residents suffering from dementia rely on the independent judgment of our nation’s healthcare professionals for their personal care and their medical treatment,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Department of Justice’s Civil Division. “Kickbacks to entities making drug recommendations compromise their independence and undermine their role in protecting nursing home residents from the use of unnecessary drugs.”
Nursing homes rely on consultant pharmacists, such as those employed by Omnicare, to review their residents’ medical charts at least monthly and make recommendations to their physicians about what drugs should be prescribed for those residents.
The federal government alleged that Abbott gave kickbacks to Omnicare in the form of “grants” and “educational funding” in exchange for Omnicare recommending Depakote, an anti-epileptic drug.
Among the government charges was that Abbott paid for Omnicare management meetings on Amelia Island, Florida, and offered tickets to sporting events to Omnicare management.
In May 2012, Abbott entered into a $1.5 billion agreement with the federal and state governments for alleged kickbacks to nursing home pharmacies, including Omnicare and PharMerica Corp. In October 2015, PharMerica agreed to pay $9.25 million for alleged kickbacks from Abbott. The settlement announced Monday resolves Omnicare’s role in that alleged kickback scheme.
About $20.3 million of the settlement will go to the federal government, and $7.8 million to state Medicaid programs.
The settlement with Omnicare announced Monday, along with the prior settlements with Abbott and PharMerica, resolves allegations in two lawsuits filed in federal court by Richard Spetter and Meredith McCoyd, former Abbott employees. The lawsuits were filed under whistleblower provisions, which allow private individuals to sue on behalf of the government for false claims and to share in any recovery.
The government intervened and took over part of the case in May 2014. As part of Monday’s resolution, McCoyd will receive $3 million from the federal share of the settlement.
CVS Health Corp. acquired Omnicare in 2015, about six years after Omnicare ended the alleged conduct.
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