Nursing Home Pharmacy Omnicare and Drug Maker Settle Case Over Kickback Schemes for $112M

Omnicare Inc., which specializes in supplying nursing homes with medicine, and IVAX pharmaceuticals, a subsidiary of Teva Pharmaceuticals, will pay a combined $112 million for their involvement in an alleged kickback scheme in which the government claims they paid nursing homes to prescribe their drugs to residents.

The settlement, announced Tuesday, does not contain an admission of guilt from either company regarding the Department of Justice charges. Justice department officials are still investigating drug maker Johnson & Johnson and two nursing home chains, Mariner Health Care and SavaSeniorCare Administrative Services, for alleged involvement in the scheme. Johnson & Johnson allegedly paid Omnicare $50 million for the company to convince nursing homes to prescribe the anti-psychotic drug Risperdal, and the two nursing home chains allegedly received $50 million from Omnicare in the form of kickbacks. IVAX also allegedly paid Omnicare $8 million, and in return the company pushed nursing homes to prescribe $50 million worth of IVAX drugs to elderly residents.

Justice department investigators said that the illegal nursing home drug kickbacks were hidden as data fees, education fees and as payment to attend Omnicare meetings.

Source: Reuters –  Nation’s Largest Nursing Home Pharmacy and Drug Manufacturer to Pay $112 Million to Settle False Claims Act Cases