Covington, Ky.-based Omnicare, the nation's largest nursing home pharmacy, will pay $98 million, and IVAX Pharmaceuticals of Weston, Fla., a drug manufacturer, will pay $14 million to settle false claims allegations, which allege the companies engaged in a kickback scheme, according to a Department of Justice news release.
According to the allegations, Omnicare solicited, and IVAX, now a subsidiary of Teva Pharmaceuticals, paid $8 million in kickbacks to the company in exchange for Omnicare's agreement to purchase $50 million in drugs from IVAX.
The company also allegedly solicited and received kickbacks from Johnson & Johnson in exchange for agreeing to recommend that physicians prescribe Risperdal, a J&J antipsychotic drug, 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 release. Omnicare also allegedly regularly paid kickbacks to nursing homes by providing consultant pharmacist services at rates below the company's cost and below the fair market value of such services in order to induce the homes to refer their patients to Omnicare for pharmacy services.
As part of the settlement, Omnicare and IVAX have agreed to enter into separate corporate integrity agreements with the Office of Inspector General of the Department of Health and Human Services. Those agreements provide for procedures and reviews to be put in place to avoid and promptly detect conduct similar to that which gave rise to these matters.
The federal government also filed complaints against two large nursing home chains, Mariner Health Care and SavaSeniorCare Administrative Services, both based in Atlanta, and their principals, Leonard Grunstein, Murray Forman and Rubin Schron, for accepting a kickback from Omnicare in return for pharmacy services contracts.
The U.S. government alleges that Omnicare, Mariner Health Care, SavaSenior Care, Mr. Grunstein, Mr. Forman and Mr. Schron conspired to arrange for Omnicare to pay the nursing home chains $50 million in exchange for the right to continue providing pharmacy services to the nursing homes, which together constituted one of Omnicare's largest customers. According to the government's complaint, these defendants attempted to disguise the $50 million kickback as a payment to acquire a small Mariner Health Care business unit that had only two employees and was worth far less than $50 million.
The $112 million settlement resolves the allegations against Omnicare and IVAX. However, the DOJ will proceed with its case against the Mariner Health Care defendants, which was originally filed by a whistleblower.
Read the DOJ's release on the Omnicare kickback settlement.
According to the allegations, Omnicare solicited, and IVAX, now a subsidiary of Teva Pharmaceuticals, paid $8 million in kickbacks to the company in exchange for Omnicare's agreement to purchase $50 million in drugs from IVAX.
The company also allegedly solicited and received kickbacks from Johnson & Johnson in exchange for agreeing to recommend that physicians prescribe Risperdal, a J&J antipsychotic drug, 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 release. Omnicare also allegedly regularly paid kickbacks to nursing homes by providing consultant pharmacist services at rates below the company's cost and below the fair market value of such services in order to induce the homes to refer their patients to Omnicare for pharmacy services.
As part of the settlement, Omnicare and IVAX have agreed to enter into separate corporate integrity agreements with the Office of Inspector General of the Department of Health and Human Services. Those agreements provide for procedures and reviews to be put in place to avoid and promptly detect conduct similar to that which gave rise to these matters.
The federal government also filed complaints against two large nursing home chains, Mariner Health Care and SavaSeniorCare Administrative Services, both based in Atlanta, and their principals, Leonard Grunstein, Murray Forman and Rubin Schron, for accepting a kickback from Omnicare in return for pharmacy services contracts.
The U.S. government alleges that Omnicare, Mariner Health Care, SavaSenior Care, Mr. Grunstein, Mr. Forman and Mr. Schron conspired to arrange for Omnicare to pay the nursing home chains $50 million in exchange for the right to continue providing pharmacy services to the nursing homes, which together constituted one of Omnicare's largest customers. According to the government's complaint, these defendants attempted to disguise the $50 million kickback as a payment to acquire a small Mariner Health Care business unit that had only two employees and was worth far less than $50 million.
The $112 million settlement resolves the allegations against Omnicare and IVAX. However, the DOJ will proceed with its case against the Mariner Health Care defendants, which was originally filed by a whistleblower.
Read the DOJ's release on the Omnicare kickback settlement.