PharMerica Corp. and Kindred Healthcare have agreed in principle to out-of-court settlements in a whistleblower suit that implicated the companies in alleged massive kickback schemes involving a popular anemia treatment medicine.
Judge Joseph Anderson Jr. of the U.S. District Court for the District of South Carolina dismissed the lawsuit without prejudice last week after learning that a settlement had been reached. A PharMerica attorney told McKnight’s on Friday that the company was unable to comment until the settlement was finalized and fully approved by authorities. Anderson issued the order to vacate on Tuesday, apparently with full confidence that the parties will formally settle within the 45-day limit he gave.
Kindred had not responded to a McKnight’s request for comment as of press time.
Plaintiff Frank Kurnik, a former director of long-term care and home health-care divisions at Amgen, filed the original False Claim Act allegations. He maintained that Amgen paid kickbacks to PharMerica, the second-largest pharmacy services company in long-term care, and Kindred Healthcare Inc., an operator of hospitals, LTAC hospitals, nursing homes and more, to induce providers and pharmacists to switch patients from the drug Procrit to Amgen’s drug Aranesp.
Omnicare, the nation’s biggest LTC pharmacy provider and an earlier co-defendant in the case, settled with the government in February 2014 for $4.2 million. The government declined to intervene in the allegations against PharMerica and Kindred, however. Amgen settled with the government in April 2013 for $24.9 million.
PharMerica and Kindred tried to convince the court to dismiss the case under the False Claim Act’s “first to file” provision, which attempts to dissuade “copycat” whistleblower suits involving the same defendants under similar circumstances. That failed earlier this year, however. The court explained that a prior lawsuit filed in Wisconsin that alleged a kickback scheme against PharMerica was dismissed voluntarily by the whistleblower before Kurnik filed his own lawsuit, and therefore Kurnik’s allegations were still valid under the provision.