Omnicare today agreed to pay $28.1 million to resolve allegations that it solicited and received millions of dollars in kickbacks from drug maker Abbott Laboratories, the Justice Department announced.  CVS Health acquired Ohio-based Omnicare in 2015, approximately six years after Omnicare ended the conduct that gave rise to the settlement.

Approximately $20.3 million of the settlement will go to the United States, while $7.8 million has been allocated to cover Medicaid program claims by states that elect to participate in the settlement.  The Medicaid program is jointly funded by the federal and state governments.

According to the government’s complaint, Omnicare solicited and received kickbacks from drug maker Abbott in exchange for promoting the anti-epileptic drug, Depakote, to nursing home residents. Abbott allegedly made payments to Omnicare described as “grants” and “educational funding,” even though their true purpose was to induce Omnicare to recommend Depakote. 

For example, Omnicare allegedly solicited substantial contributions from Abbott and other pharmaceutical manufacturers to its “Re*View” program.  Although Omnicare claimed that Re*View was a “health management” and “educational” program, the complaint alleges that it was simply a means by which Omnicare solicited kickbacks from pharmaceutical manufacturers in exchange for increasing the utilization of their drugs on elderly nursing home residents.  In internal documents, Omnicare allegedly referred to Re*View as its “one extra script per patient” program. 

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 on Amelia Island, Florida, offered tickets to sporting events to Omnicare management and made other payments to local Omnicare pharmacies.

Prior settlements

In May 2012, the United States, numerous states, and Abbott entered into a $1.5 billion global civil and criminal resolution that, among other things, resolved Abbott’s liability under the False Claims Act for alleged kickbacks to nursing home pharmacies, including Omnicare and PharMerica.  In October 2015, PharMerica agreed to pay $9.25 million to the United States and numerous states to resolve civil liability under the False Claims Act for the alleged kickbacks from Abbott.  The settlement announced today resolves Omnicare’s role in that alleged kickback scheme.

The Omnicare settlement, together with the prior settlements with Abbott and PharMerica, resolves allegations in two lawsuits, United States ex rel. Spetter v. Abbott Labs and United States ex rel. McCoyd v. Abbott Labs, filed in federal court in the Western District of Virginia by Richard Spetter and Meredith McCoyd, former Abbott employees. The lawsuits were filed under the whistleblower provisions of the False Claims Act (FCA), 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 did in this case. McCoyd will receive $3 million from the federal share of the settlement amount.

This matter was jointly handled by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Western District of Virginia, HHS-OIG, the Office of the Attorney General for the Commonwealth of Virginia, and the National Association of Medicaid Fraud Control Units.

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