Consumer Fraud

Nation’s largest nursing home pharmacy provider settles whistleblower lawsuit for $124.24 million

osha whistle Nation’s largest nursing home pharmacy provider settles whistleblower lawsuit for $124.24 millionOmnicare Inc., the country’s largest provider of prescription drugs and pharmacy services to nursing homes, has agreed to pay the U.S. more than $124 million to settle whistleblower allegations that it defrauded federal and state Medicare and Medicaid programs through false billings and engaged in illegal kickback schemes.

The latest settlement marks the third time in one year that the Cincinnati-based corporation has agreed to settle whistleblower allegations brought against it under the federal False Claims Act, which contains provisions allowing individuals to sue on behalf of the U.S. government when they have good, original evidence of wrongdoing.

Additionally, Omnicare has settled other whistleblower lawsuits in 2009 and 2010.

The latest whistleblower lawsuit was filed by Donald Gale, a former Omnicare pharmacist who accused the company of offering improper financial incentives to skilled nursing facilities in exchange for their continued selection of Omnicare to supply drugs to elderly Medicare and Medicaid beneficiaries. Mr. Gale will receive $17.24 million for his role in helping the U.S. recover millions for taxpayer-funded health care programs fraudulently taken by Omnicare.

Omnicare proposed a $120-million settlement with the U.S. last October without admitting liability, but the terms had not been finalized and agreed upon.

According to the lawsuit, Omnicare submitted false claims by entering into below-cost contracts to supply prescription drugs to skilled nursing facilities and their resident patients, thereby inducing the facilities to select Omnicare as their pharmacy provider.

Of the $124.24 million to be paid by Omnicare, $8.24 million will go to various states that jointly funded the Medicaid programs harmed by Omnicare’s billing and kickback schemes.

In February, Omnicare agreed to pay the U.S. more than $4 million to settle a whistleblower lawsuit in South Carolina alleging the company engaged in illegal kickbacks.

In June 2013, Omnicare paid $20 million to settle accusations of a whistleblower in Chicago alleging the company bought institutional pharmacies at above-market rates in violation of anti-kickback statutes.

Omnicare paid $98 million to the U.S. government in November 2009 to settle five whistleblower complaints alleging it participated in a number of kickback schemes, including receiving kickbacks from medical giant Johnson & Johnson for recommending that doctors prescribe its antipsychotic drug Risperdal to nursing home patients.

In 2010, Omnicare settled two other whistleblower lawsuits alleging the company participated in kickback schemes and defrauded Medicare and Medicaid programs.


U.S. Department of Justice