U.S. Justice Department Claims Omnicare, Inc. Received Kickbacks From Abbott Laboratories
December 23, 2014
By Riley McDermid, BioSpace.com Breaking News Sr. Editor
Nursing home pharmacy provider Omnicare is in trouble with the U.S. Department of Justice again, after a new lawsuit filed this week claims the company received millions of dollars in kickbacks from Abbott Laboratories in exchange for recommending its drug Depakote to control epilepsy in elderly patients suffering from dementia.
The doctors involved in the scheme would then recommend Depakote be used to control behavioral disturbances in dementia patients, an application for which it has not been approved by the U.S. Food and Drug Administration (FDA).
“Omnicare entered into agreements with some drug manufacturers, including Abbott, to recommend that manufacturer's products over competitor drugs in exchange for 'rebates' and other payments and remuneration,” according to the complaint filed via two consolidated lawsuits filed under the False Claims Act in the Western District of Virginia.
“These payments undermined the independence of the consulting pharmacists and subverted their role of ensuring that nursing homes complied with OBRA regulations such that they, in fact, became an extension of the drug manufacturers' sales forces,” said the DOJ.
The lawsuits were originally filed by whistleblowers who are now entitled to any settlement money reached under federal laws protecting, and often rewarding, employees brave enough to speak up about illegal activity at their companies.
The DOJ said in its complain that Omnicare allegedly disguised the kickbacks from Abbott as "grants" and "educational funding." The allegations also include news that Abbott also allegedly footed the bill for sporting tickets for Omnicare managers, paid for Omnicare meetings in Florida and made various other payouts directly to regional Omnicare offices.
This is not the first time the company has tangled with the law over kickback allegations. Last year, Omnicare shelled out $124 million in a settlement with the Justice Department after it was on the hook for kickbacks to secure contracts to supply drugs to nursing homes with Medicare and Medicaid patients. For its part, Abbott, too, is familiar with the process: In 2012, it was forced to pay a $1.5 billion settlement with the government and a group of states as part of its resolution of allegations it had engaged in kickbacks to nursing home pharmacies.
Neither company responded to a request for comment early Tuesday.