Omnicare to pay $98 million settlement in kickback scheme; separate complaint filed against Mariner, SavaSenior Care nursing home chains

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British health official: Cure for dementia could come by 2020
British health official: Cure for dementia could come by 2020

Long-term care pharmacy giant Omnicare has agreed to pay a $98 million settlement in connection with allegations it engaged in an illegal kickback scheme with drug maker Ivax, the U.S. Department of Justice announced Tuesday.

The same day, officials said they filed an additional complaint against Omnicare and nursing home giants Mariner and SavaSenior Care in relation to other alleged kickback schemes.

Omnicare, the nation's largest provider of nursing home pharmacy services, solicited and accepted $8 million from Ivax in exchange for ordering $50 million worth of drugs from it, according to authorities. Ivax will pay $14 million as part of the settlement, authorities said. Omnicare also allegedly received kickbacks from drug maker Johnson & Johnson in exchange for recommending that doctors prescribe J&J's antipsychotic drug Risperdal to nursing home residents.

In a prepared statement, Omnicare said that it “cooperated fully” with authorities' investigation and “is pleased to have reached a resolution.” It said the settlement relates to a previously announced agreement. The False Claims Act prosecution began as a “whistleblower” lawsuit; the settlement was announced in U.S. District Court in Massachusetts.

As part of the settlement, Omnicare said it will add five years to a corporate integrity agreement it first entered into with the Department of Health and Human Services' Office of the Inspector General in 2006.

Another complaint, which authorities disclosed Tuesday, claims that Omnicare, Mariner, SavaSenior Care and their representatives conspired to have Omnicare pay $50 million in kickbacks to funnel nursing home chain business to the pharmacy provider. The parties allegedly attempted to disguise the kickbacks as the purchase of a Mariner business unit with only two employees and worth much less, authorities say.

The accused nursing home representatives allegedly tried to backdate documents to cover any wrongdoing, federal officials said. This complaint stems from “whistleblower” allegations by the same individuals who will collect hundreds of thousands of dollars from the Ivax settlement announced Tuesday.


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