Pharmaceutical Manufacturer and Nation’s Largest Nursing Home Pharmacy Agree To Pay $112 Million To Settle Qui Tam Lawsuit

On November 3, 2009, the U.S. Department of Justice issued a press release announcing that it had reached a settlement agreement in which Omnicare, Inc. agreed to pay $98 million and IVAX Pharmaceuticals, Inc. agreed to pay $14 million to settle a lawsuit brought by several whistleblowers on behalf of the Government alleging that Omnicare carried out illegal kickback schemes with IVAX and others in violation of the False Claims Act.  The lawsuit alleged that Omnicare facilitated four different types of illegal kickback schemes:  1)  that Omnicare solicited and received kickbacks from Johnson & Johnson in exchange for recommending that doctors prescribe Risperdal, a Johnson & Johnson antipsychotic drug, to nursing home patients; 2) that Omnicare paid kickbacks to nursing homes by providing them with consultant pharmacist services at below cost and fair market value rates; 3) that Omnicare solicited and IVAX paid $8 million in kickbacks to Omnicare in exchange for Omnicare agreeing to purchase $50 million in drugs from IVAX; and 4) that Omnicare conspired with others to arrange a $50 million payment to nursing home chains in exchange for the right to continue providing nursing home services.  The payments to the whistleblowers who disclosed this misconduct to the Government have not been finalized yet, but under the False Claims Act whistleblowers may receive a payment of between 15 – 25% of the total settlement proceeds.

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