Health Law Daily Omnicare settles up Depakote® kickback tab for $28M
Tuesday, October 18, 2016

Omnicare settles up Depakote® kickback tab for $28M

By Anthony H. Nguyen, J.D.

Omnicare Inc., the largest nursing home pharmacy in the United States, agreed to pay $28.125 million to resolve allegations that it solicited and received kickbacks from pharmaceutical manufacturer Abbott Laboratories in exchange for promoting the anti-epileptic prescription drug Depakote® for nursing home patients. Nursing homes use consultant pharmacists, such as those employed by Omnicare, to review residents’ medical charts at least monthly and make recommendations to their physicians about what drugs should be prescribed for those residents. Approximately $20.3 million of the settlement will go to the United States, while $7.8 million has been allocated to cover Medicaid program claims by states that elect to participate in the settlement.

According to the government’s complaint, Omnicare disguised the kickbacks it received from Abbott through payments categorized as "grants" and "educational funding," even though the intent was to induce Omnicare to recommend Depakote (see Omnicare again accused anti-kickback violations, this time for promoting Abbott’s Depakote, December 23, 2014). For instance, Omnicare allegedly solicited substantial contributions from Abbott and other pharmaceutical manufacturers to its "Re*View" program. Omnicare claimed that Re*View was a "health management" and "educational" program; the government alleged, instead, Omnicare used the program to solicit kickbacks from pharmaceutical manufacturers in exchange for increasing the utilization of their drugs on elderly nursing home residents.

The government also contended that that Omnicare entered into agreements with Abbott with increasing levels of rebates from Abbott based on the number of nursing home residents serviced and the amount of Depakote prescribed per resident. Abbot also provided sporting tickets and funding for Omnicare management meetings. In May 2012, Abbott entered into a $1.5 billion global civil and criminal resolution that, among other things, resolved Abbott’s liability under the False Claims Act for alleged kickbacks to nursing home pharmacies, including Omnicare (see The DOJ sets record for health care fraud recoveries in FY 2012, including the largest health care fraud settlement in U.S. history, December 5, 2012).

The Omnicare settlement, along with the prior settlements with Abbott, resolves allegations in two lawsuits filed in federal court in the Western District of Virginia. Omnicare was acquired by CVS Health Corporation in 2015 – approximately six years after Omnicare ended the conduct that gave rise to the settlement.

Companies: Omnicare, Inc.; Abbott Laboratories

MainStory: TopStory AgencyNews ReimbursementNews ComplianceNews DrugNews CMSNews AntikickbackNews AuditNews DrugBiologicNews FraudNews MedicaidNews PrescriptionDrugNews ProgramIntegrityNews

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