Omnicare to pay $28 million to settle charges it got kickbacks from Abbott Labs
Omnicare Inc, the largest nursing home pharmacy in the United States, will pay about $28.1 million to resolve civil charges that it sought and received kickbacks from Abbott Laboratories to promote the drug maker's anti-seizure drug Depakote, the U.S. Justice Department said.
Omnicare was acquired by CVS Health Corp in 2015, about six years after Omnicare put a stop to the conduct at the heart of Monday's settlement, the Justice Department added.
A CVS spokesperson did not immediately respond to a request for comment on Monday's settlement.
The Justice Department said Omnicare disguised the kickbacks it received from Abbott by claiming they were "grants" and "educational funding."
Those payments, however, were part of a plan by the drug maker to get physicians to prescribe Depakote to elderly nursing home patients. Omnicare solicited the payments via its "Re*View" program, which in internal documents it called its "one extra script per patient" program.
Abbott Laboratories entered into a $1.5 billion global civil and criminal resolution in May 2012 that resolved its liability for violations of the False Claims Act for paying alleged kickbacks to Omnicare as well as PharMerica Corp.
In October 2015, PharMerica agreed to pay $9.25 million to resolve its role in receiving kickbacks from Abbott Labs.
The Justice Department said $20.3 million of its settlement with Omnicare will be paid in restitution to U.S. government health insurance programs, while the remaining $7.8 million will be allocated to cover Medicaid program claims by states.
The settlements with Omnicare, Abbott Labs and PharMerica will resolve allegations in two lawsuits filed by former Abbott Lab employees who blew the whistle on the kickbacks.
One of those whistle blowers, Meredith McCoyd, will receive a $3 million payout for her role in helping uncover the scheme, the Justice Department said.