Omnicare has announced it will settle with the Department of Justice in two federal suits accusing the pharmacy giant of taking kickbacks from Abbott Laboratories.
Omnicare and the DOJ filed a joint motion on Tuesday to stay two False Claims Act suits filed by sales representatives that allege Omnicare accepted millions of dollars kickbacks from Abbott in exchange for promoting the use of seizure drug Depakote in nursing homes.
The suits claim Omnicare received kickbacks in the form of drug rebates, Abbott-funded meetings in Florida and sports tickets between 1998 and 2008. The kickbacks allegedly led to a spike in Depakote claims to Medicare and Medicaid, from less than $3 million in 1998 to $92 million in 2008.
The DOJ intervened in the FCA suits in December 2014, saying the kickbacks put vulnerable residents at risk for unnecessary drugs. Abbott was dismissed from the claims in 2012 after pleading guilty to drug misbranding, and agreeing to a $1.6 billion settlement.
While the Omnicare settlement is a positive sign that the DOJ takes kickback cases seriously, said Tim McCormack, a whistleblower attorney at Constantine Cannon in Washington, D.C., he added that the case should be a “big red warning flag” for long-term care providers.
“Administrators should be asking hard questions about any financial incentives the pharmacist or their employer may have to promote one drug over another,” McCormack told McKnight’s on Tuesday. “Depending on the long-term care facility’s financial and operational relationship with the outside pharmacy, there is some risk that the facility could be exposed to liability under the False Claims Act for violations of the Anti-kickback statute by the pharmacy or its pharmacists.”
Aside from the risk of False Claims Act violations, McCormack said kickbacks carry the potential for serious patient harm if consulting pharmacists make drug decisions based on financial incentive, rather than what is best for the patient.