January 05, 2015 Practice Points

DOJ Intervenes in Whistleblower Suits Accusing Omnicare of Kickbacks

The company is the nation’s largest provider of pharmacy services to nursing homes.

By Sarah Anna Santos

The U.S. Department of Justice has intervened in two False Claims Act suits accusing Omnicare Inc., the nation’s largest provider of pharmacy services to nursing homes, of receiving kickbacks from drug manufacturer Abbot Laboratories Inc. in exchange for promoting the seizure drug Depakote. According to the complaint, Omnicare touted Depakote as a tool to control agitation in dementia patients of the nursing homes that Omnicare serviced, and to avoid federal regulations preventing the use of chemical restraints on the elderly.

Omnicare received millions of dollars in kickbacks disguised as rebates, educational grants, and other corporate financial support, the complaint alleged, and caused Medicaid and Medicare programs to pay hundreds of millions of dollars for invalid claims. Between 1998 and 2008, Medicare and Medicaid claims for Depakote prescriptions rose from less than $3 million to over $92 million.

The Department of Justice is seeking treble damages, restitution, and civil penalties. The cases are United States of America et al., ex rel. McCoyd v. Abbott Laboratories et al., case number 1:07-cv-00081, and United States of America et al., ex rel. Spetter v. Abott Laboratories Inc. et al., case number 1:10-cv-00006, in the U.S. District Court for the Western District of Virginia.

— Sarah Anna Santos, Hunton & Williams LLP, Charlotte, NC

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