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Nursing Home Pharmacy Giant to Cough Up $28 Million Over Drug Kickbacks

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After it was caught accepting direct payments, lavish vacations, and sports tickets from a drug company seeking to improperly boost profits, Omnicare Inc. has agreed to a settlement with the US Department of Justice.

The nation’s largest nursing home pharmacy will pay $28 million for its role in a massive kickback scheme perpetrated by drug manufacturer Abbott Laboratories dating back six years.

“Omnicare solicited and received kickbacks from Abbott in exchange for recommending that physicians prescribe Depakote, an anti-epileptic drug manufactured by Abbott, to elderly nursing home residents,” The DOJ detailed in a press release Monday, announcing the settlement.

The department noted that Abbott’s payments to Omnicare were often disguised as “grants” or “educational funding.” The drug manufacturer also financed Omnicare’s management meetings on Amelia Island, Fla.

Abbott also gifted sporting event tickets to Omnicare executives, the DOJ stated.

“Every day, elderly nursing home residents suffering from dementia rely on the independent judgment of our nation’s healthcare professionals for their personal care and their medical treatment,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer on Monday. He added that, “Kickbacks to entities making drug recommendations compromise their independence and undermine their role in protecting nursing home residents from the use of unnecessary drugs.”

Abbott Laboratories had already agreed to pay $1.5 billion in 2012 to settle civil and criminal charges stemming from its kickback operations with several pharmacies. The DOJ noted that this week’s Omnicare settlement resolves that company’s role in the broader scheme.

The allegations against Abbott Laboratories were first lodged by former employees at the company, Richard Spetter and Meredith McCoyd. Since the prior lawsuits were filed under whistleblower provisions of the False Claims Act, McCoyd will receive $3 million from the federal share of the settlement with Omnicare.

“It is disturbing that any health care corporation would pay kickbacks that corrupt the professional medical decision making process in order to pad their profits,” said Nicholas DiGiulio, the Special Agent in Charge of the Department of Health and Human Services Office of Inspector General (HHS OIG).

“These practices are unacceptable and will not be tolerated,” he added.

Omnicare was acquired in 2015 by CVS Health Group for more than $10 million.

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Sam Sacks worked on the Hill as a Congressional staffer, and as a writer and reporter since 2008. He’s been published in Hustler Magazine, which you may have seen but don’t want to admit.

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