LTC drug kickback case settles for $28M
A kickback case against Omnicare came to a conclusion in October, with the pharmacy titan agreeing to pay $28 million to clear up allegations that it promoted an anti-seizure medication to nursing home residents in exchange for money and sports tickets.
The agreement between the Department of Justice and the nation's largest skilled nursing pharmacy officially puts to rest claims that Omnicare received kickbacks from pharmaceutical company Abbott Laboratories to encourage physicians to prescribe the drug Depakote to residents.
The alleged kickbacks, sometimes given in the form of drug rebates, paid meetings in Florida and sports tickets, were purportedly referred to in internal company documents as the “one extra script per patient” program. Omnicare's promotions reportedly caused a spike in Depakote claims to the Medicare and Medicaid programs.
The settlement was first announced in a joint motion filed between Omnicare and the DOJ in July 2015. At that time, one law expert said the case should serve as a “big red warning flag” for providers.
“Administrators should be asking hard questions about any financial incentives the pharmacist or their employer may have to promote one drug over another,” Tim McCormack, a whistleblower attorney at Constantine Cannon in Washington, D.C., told McKnight's.
The DOJ reached a $1.5 billion settlement with Abbott in the case in 2012, with long-term care pharmacy PharMerica resolving similar kickback claims involving Depakote for $9.25 million last fall.
Omnicare was purchased by CVS in May 2015 for $10.4 billion. The kickback allegations occurred before the acquisition, but CVS officials still “agreed to settle the case to avoid the expense and uncertainty that comes with a lengthy legal battle,” a spokesman told the Associated Press.