A federal False Claims Act (FCA) lawsuit has been filed by the U.S. Department of Justice (DOJ) against Omnicare Inc., the nation’s largest provider of pharmaceuticals and pharmacy consulting services to nursing homes. The DOJ’s complaint alleges that Omnicare solicited and accepted millions of dollars in kickbacks from Abbott Laboratories to promote Abbott’s anti-epileptic drug, Depakote®, for controlling behavioral disturbances exhibited by dementia patients residing in nursing homes serviced by Omnicare.
Prior Settlement by Abbott
In May 2012, the United States, numerous individual states, and Abbott entered into a $1.5 billion global civil and criminal resolution that, among other things, resolved Abbott’s civil liability under the FCA for its unlawful promotion of Depakote for uses not approved as safe and effective by the FDA. The resolution, the second largest payment by a drug company, included a criminal fine and forfeiture totaling $700 million and civil settlements with the federal government and the states totaling $800 million. Abbott also was made subject to court-supervised probation and reporting obligations for Abbott’s Chief Executive Officer and Board of Directors.
The DOJ’s Complaint
Federal regulations designed to protect nursing home residents from unnecessary drugs require nursing homes to retain consulting pharmacists. According to the DOJ’s complaint, Omnicare’s consulting pharmacists reviewed nursing home patients’ charts at least monthly and made recommendations to physicians on what drugs should be prescribed for those patients. The complaint alleges that Omnicare used its influence over physicians in the nursing homes they serviced to secure kickbacks from pharmaceutical companies such as Abbott. The complaint further alleges that Omnicare:
- disguised the kickbacks it received by accepting payments from Abbott described as “grants” and “educational funding,” even though their true purpose was to induce Omnicare to recommend Depakote;
- solicited contributions from Abbott and other pharmaceutical manufacturers to its Re*View program, which was not a “health management” or “educational” program as claimed by Omnicare, but simply a means by which Omnicare solicited kickbacks; and
- entered into agreements with Abbott by which Omnicare was entitled to increasing levels of rebates based on the number of nursing home residents serviced and the amount of Depakote prescribed per resident.
Finally, the complaint alleges that Abbott funded Omnicare management meetings on Amelia Island, Florida, offered tickets to sporting events to Omnicare management, and made other payments to local Omnicare pharmacies.
Previous Omnicare Settlement
In June, 2014, Omnicare agreed to pay $124.24 million for allegedly offering improper financial incentives to skilled nursing facilities in return for their continued selection of Omnicare to supply drugs to elderly Medicare and Medicaid beneficiaries. The settlement resolved allegations that Omnicare submitted false claims by entering into below-cost contracts to supply prescription medication and other pharmaceutical drugs to skilled nursing facilities and their resident patients to induce the facilities to select Omnicare as their pharmacy provider.
The DOJ filed its current complaint against Omnicare in two consolidated whistleblower lawsuits filed under the FCA in the Western District of Virginia. The cases are U.S. ex rel. Spetter v. Abbott Labs, Case No. 10-cv-00006 and U.S. ex rel. McCoyd v. Abbott Labs, Case No. 07-cv-00081.
The government’s complaint contains allegations only. There has been no determination of liability against Omnicare.