The Department of Justice this week announced that it has intervened in two consolidated whistleblower lawsuits against drug company Omnicare over allegations that it solicited and received millions of dollars in kickbacks from drug maker Abbott Laboratories.
The two cases, United States ex rel. Spetter v. Abbott Labs and United States ex rel. McCoyd v. Abbott Labs, were filed in the Western District of Virginia under the whistleblower provisions of the False Claims Act, which allow private parties to sue on behalf of the government for the submission of false claims for government funds and to receive a share of any recovery. The FCA also permits the government to intervene in such lawsuits, as it has done in this case.
“Although the United States Attorney’s Office for the Western District of Virginia is small, we will not waver in our pursuit of the largest corporations, like Omnicare and Abbott, who illegally raid the coffers of Medicaid, Medicare, and other healthcare benefit programs,” Acting U.S. Attorney Anthony Giorno for the Western District of Virginia said in a statement.
In its complaint, the government alleges that Omnicare solicited and received kickbacks from Abbott in exchange for purchasing and recommending the prescription drug Depakote. According to the complaint, Omnicare’s pharmacists reviewed nursing home patients’ charts at least monthly and made recommendations to physicians on what drugs should be prescribed for those patients. The government alleges that Omnicare touted its influence over physicians in nursing homes in order to secure kickbacks from pharmaceutical companies such as Abbott.
The United States alleges that Omnicare disguised the kickbacks it received from Abbott in a variety of ways, including as “grants” and “educational funding,” even though their true purpose was to induce Omnicare to recommend Depakote.
The complaint also alleges that Omnicare entered into agreements with Abbott by which Omnicare was entitled to increasing levels of rebates from Abbott based on the number of nursing home residents serviced and the amount of Depakote prescribed per resident. Finally, the complaint alleges that Abbott funded Omnicare management meetings, offered tickets to sporting events to Omnicare management, and made other payments to local Omnicare pharmacies.
In 2012, the United States, numerous individual states, and Abbott entered into a $1.5 billion global civil and criminal resolution that, among other things, resolved Abbott’s civil liability under the False Claims Act for paying kickbacks to nursing home pharmacies.
This investigation was jointly handled by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Western District of Virginia, the Department of Health and Human Services Office of Inspector General, the Office of the Attorney General for the Commonwealth of Virginia and the National Association of Medicaid Fraud Control Units.