The nation's largest nursing home pharmacy will pay $98 million and the drugmaker will pay $14 million to resolve allegations that Omnicare engaged in kickback schemes with several parties, including Ivax, according to the US Justice Department. About $68.5 million will go to the US, while $43.5 million will cover Medicaid program claims by participating states.
Among the infractions: The DOJ alleged that Omnicare solicited, and Ivax paid, $8 million in kickbacks in exchange for Omnicare’s agreement to purchase $50 million in drugs from Ivax, which is now a subsidiary of Teva Pharmaceuticals (here is the Omnicare settlement and here is the Ivax settlement).
Omnicare also allegedly solicited and received kickbacks from Johnson & Johnson in exchange for agreeing to recommend that physicians prescribe its Risperdal antipsychotic to nursing home patients. J&J’s kickbacks to Omnicare took multiple forms, including rebates that were conditioned on Omnicare engaging in an "Active Intervention Program" for Risperdal and payments disguised as data purchase fees, educational grants, and fees to attend Omnicare meetings, according to the DOJ.
"These defendants broke the law to take advantage of our nation’s most vulnerable citizens – the elderly and the poor," Tony West, Assistant Attorney General for the Civil Division of the Department of Justice, says in a statement. "Illegal conduct like this can undermine the medical judgments of health care professionals, lead to patients being prescribed medications they do not need, and drive up the costs of health care."
"Omnicare and other nursing home pharmacies specialize in providing drugs to elderly patients who are often suffering from Alzheimer’s Disease or dementia and who have little or no control over the drugs they receive," adds Michael Loucks, Acting US Attorney in Boston, in the same statement. "Today’s settlement provides a strong message to these pharmacies, as well as to pharmaceutical companies and nursing homes, that the government will not tolerate the payment of kickbacks which can distort proper medical judgment and put profits ahead of good medical care."