Omnicare took million in kickbacks, US claims
The U.S. Justice Department Monday filed a civil False Claims Act complaint against
Omnicare Inc., accusing the Downtown Cincinnati-based company of soliciting and receiving tens of millions of dollars in kickbacks from pharmaceutical manufacturer Abbott Laboratories from 1998 to 2008.
Neither spokesmen for Omnicare, the nation's largest provider of pharmaceuticals and pharmacy consulting services to nursing homes, nor Abbott were available for comment.
Federal regulations designed to protect nursing home residents from unnecessary drugs require nursing homes to retain consulting pharmacists such as those provided by Omnicare to ensure that residents' drug prescriptions are appropriate.
In its complaint, the United States alleges that Omnicare solicited and received kickbacks from Abbott in exchange for purchasing and recommending the prescription drug Depakote for controlling behavioral disturbances exhibited by dementia patients residing in nursing homes served by Omnicare. According to the complaint, Omnicare's pharmacists reviewed nursing home patients' charts at least monthly and made recommendations to physicians on what drugs should be prescribed for those patients. The government charges that Omnicare touted its influence over physicians in nursing homes in order to secure kickbacks from pharmaceutical companies such as Abbott.
"Elderly nursing home residents suffering from dementia are among our nation's most vulnerable patient populations, and they depend on the independent judgment of health care professionals for their daily care," said Acting Assistant Attorney General Joyce R. Branda for the Justice Department's Civil Division. "Kickbacks to consulting pharmacists compromise their independence and undermine their role in protecting nursing home residents from the use of unnecessary drugs."
The government accused Omnicare of disguising the kickbacks it received from Abbott in a variety of ways. Abbott allegedly made payments to Omnicare described as "grants" and "educational funding," even though their true purpose was to induce Omnicare to recommend Depakote, an anti-seizure drug for patients with dementia. For example, according to the complaint, Omnicare solicited substantial contributions from Abbott and other pharmaceutical manufacturers to its "Re*View" program. Although Omnicare claimed that Re*View was a "health management" and "educational" program, the complaint alleges that it was simply a means by which Omnicare solicited kickbacks from pharmaceutical manufacturers in exchange for increasing the utilization of their drugs on elderly nursing home residents.
In internal documents, Omnicare allegedly referred to Re*View as its "one extra script per patient" program. The complaint also alleges that Omnicare entered into agreements with Abbott by which Omnicare was entitled to increasing levels of rebates from Abbott based on the number of nursing home residents serviced and the amount of Depakote prescribed per resident. Finally, the complaint alleges that Abbott funded Omnicare management meetings on Amelia Island, Florida, offered tickets to sporting events to Omnicare management, and made other payments to local Omnicare pharmacies.
In May 2012, the United States, numerous individual states, and Abbott entered into a $1.5 billion global civil and criminal resolution that, among other things, resolved Abbott's civil liability under the False Claims Act for paying kickbacks to nursing home pharmacies.
The government filed its complaint against Omnicare in two consolidated whistleblower lawsuits filed under the False Claims Act in the Western District of Virginia. The whistleblower provisions of the False Claims Act authorize private parties to sue for fraud on behalf of the United States and share in any recovery.
Officials said the case illustrates the government's emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009. Since then, the Justice Department has recovered a total of more than $23.2 billion through False Claims Act cases, with more than $14.9 billion of that amount recovered in cases involving fraud against federal health care programs.
PREVIOUS OMNICARE CASES
In recent years, Omnicare has been involved in numerous whistleblower cases.
In June, federal officials Wednesday accepted the company's offer to pay $124.2 million to settle a suit accusing the company of allegedly offering improper financial incentives to skilled nursing facilities in northern Ohio in return for their continued selection of Omnicare to supply drugs to elderly Medicare and Medicaid beneficiaries.
Last February, the company paid $4 milion to resolve allegations that Omnicare solicited and received kickbacks from California-based drug manufacturer Amgen Inc. in return for implementing programs designed to switch Medicaid beneficiaries from a competitor drug to Amgen's Aranesp product.
In August 2012, it settled a 2007 lawsuit claiming it paid a kickback in buying a pharmacy company, and that it submitted false claims for reimbursement to government health insurers. Additional terms of the settlement were not released.
In May 2012, Omnicare settled another case with the U.S. Department of Justice for $50 million. The agency called it the "largest controlled substance settlement in history," and said Omnicare gave nursing home residents medicines without a prescription, with missing prescription information or without documentation. It resulted in the company being agreeing to operate under a corporate integrity agreement with the federal government.
Finally, Omnicare agreed in November 2009 to pay $98 million to settle civil allegations by the U.S. government and various states that it took kickbacks from Johnson & Johnson.
Omnicare Inc. has reached an agreement with the federal government over how much the Cincinnati-based company will pay to settle a lawsuit that alleges the firm sought and received tens of millions of dollars in kickbacks from drug manufacturer Abbott Laboratories.
A hearing on the proposed settlement and a motion to halt litigation is scheduled for July 20 before Magistrate Judge Pamela Meade Sargent of the U.S. District Court for the Western District of Virginia.
“We don’t have a comment, and we have yet to disclose any terms related to this issue,” said Patrick Lee, vice president for investor relations for Omnicare (NYSE: OCR).