Omnicare pays $28M to settle Abbott Laboratories kickback scheme allegations

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Omnicare Inc., the nation’s largest nursing home pharmacy, has agreed to pay a $28.125 million settlement for its role in a kickback scheme with drug manufacturer Abbott Laboratories.

Omnicare solicited and received kickbacks from Abbott in exchange for using its consultant pharmacists to recommend that nursing home physicians prescribe Abbott’s epilepsy drug Depakote, the U.S. Justice Department announced Monday.  

The pharmacy, which was acquired by CVS Health Corp. after the fraud occurred, is the latest participant in the kickback scheme to agree to a settlement. Abbott agreed to a $1.5 billion civil and criminal settlement with the federal government and several states in May 2012. The country’s second-largest nursing home pharmacy, PharMerica Corp., agreed to a $9.25 million settlement in the case in October 2015.

The government accused Omnicare of accepting payments from Abbott that were labeled as grants and educational funding in exchange for pushing Depakote to nursing home prescribing physicians. The government also alleged that Omnicare had an agreement with Abbott to receive increasingly higher “rebates” from the company based on the number of nursing home residents serviced and the amount of the drug prescribed per patient.

About $20.3 million of the settlement goes to the U.S. government; $7.8 million will go to reimburse state Medicaid programs. In addition, $3 million of the federal portion of the settlement goes to one of two Abbott whistleblowers, according to the Justice Department.

The federal Health Care Fraud Prevention and Enforcement Action Team played a major role in the case, according to the announcement.

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