Long-term care pharmacy giant Omnicare agreed to pay a total of $31 million in May to settle allegations it submitted false claims and accepted kickbacks to promote certain drugs.
In the first settlement, announced in mid-May, the CVS Health-owned company agreed to pay $8 million to clear up allegations that it used an automated system to submit false claims to Medicare and Medicaid. Two former Omnicare pharmacists originally filed the lawsuit.
Authorities said Omnicare designed an automated label verification system as a way to improve efficiency at some of its locations, but that system reportedly led to the company submitting claims for generic prescriptions that differed from those given to Medicare and Medicaid beneficiaries.
“Ensuring accuracy in the dispensing of and billing for medication in the Medicare Part D and Medicaid Programs, especially to long-term care patients, is vital to public safety,” Acting U.S. Attorney William E. Fitzpatrick said.
A second lawsuit against Omnicare, filed in 2007, concluded in late May with a $23 million settlement. That case involved the company allegedly taking kickbacks from pharmaceutical company Organon to promote the antidepressants Remeron and Remeron SolTabs.
Organon allegedly instructed Omnicare to tell long-term care providers that the drugs — which carried side effects including sleepiness and weight gain — would create “a more docile, easily-controlled resident population,” according to court records.
Omnicare had argued in 2016 that the price cuts on the drugs provided by Organon were legal discounts.
In both settlements, CVS noted that the allegations occurred before it purchased Omnicare for $10.4 billion in 2015, and that the company chose to settle to avoid the “expense and uncertainty” of litigation.