Largest nursing home pharmacy Omnicare to pay over $28M to settle kickback allegations

Cincinnati-based Omnicare, one of the nation's largest nursing home pharmacies, agreed to pay $28.125 million to resolve allegations the company received kickbacks from Chicago-based pharmaceutical company Abbott Laboratories to promote a prescription drug for epilepsy, according to the Department of Justice.

According to a government complaint, Omnicare allegedly disguised the kickbacks it received from Abbott as "grants" and "educational funding." Omnicare also allegedly solicited substantial contributions from Abbott and other pharmaceutical manufacturers to its "Re*View" program, which the company said was an "educational program," but officials claim was another way to disguise the funds.  The complaint alleges that Omnicare received payments in exchange for promoting the prescription drug Depakote, manufactured by Abbott, to nursing home patients.

Officials also claim Omnicare entered into agreements with Abbott by which Omnicare was entitled to rebates from Abbott based on the number of nursing home residents serviced and the amount of Depakote prescribed per resident. The complaint also alleges that Abbott funded Omnicare management's retreats in Amelia Island, Florida, offered executives tickets to sporting events and made other payments to Omnicare pharmacies.

The lawsuit was filed under the qui tam, or whistleblower, provision of the False Claims Act. According to the settlement agreement, Meredith McCoyd and Richard Spetter, two former Abbott employees who filed the initial lawsuit, will receive $3 million. Approximately $20.3 million will go to the federal government while $7.8 million was allocated to cover Medicaid program claims by states that elected to participate in the settlement.

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