Feds, states reach settlements with two companies

Nick Rees Dec. 8, 2009, 12:55pm

Van Hollen

MADISON, Wis. (Legal Newsline) - Multiple states and the federal government have reached an agreement with a Delaware pharmacy services company and a Florida generic drug manufacturer to settle allegations that the companies defrauded federal and state healthcare programs.

Omnicare, Inc., a Delaware corporation headquartered in Covington, Ky., specializing in providing pharmacy services to long term care facilities, and IVAX Pharmaceuticals, Inc., headquartered in Florida, a manufacturer of generic drugs, agreed to a federal settlement from their unlawful kickback schemes.

Wisconsin Attorney General J.B. Van Hollen has announced that his state's Medicaid program will receive a payment of $1,133,429.08 in restitution as its share of the $2,637,282.90 attributable to Wisconsin Medicaid with the remainder returned to the federal government.

"I'm committed to the protection of resources used to fund government services. We won't allow schemes like this to waste hard earned taxpayer dollars," Van Hollen said. "By aggressive enforcement we can get the most from scarce resources and still provide needed services."

The settlements are based on an investigation resulting from five separate qui tam lawsuits filed by private individuals that were consolidated in the United States District Court for the District of Massachusetts under state and federal false claims statutes. In one of the suits, Wisconsin was named as a co-plaintiff state.

Omnicare and others were alleged by government entities to have solicited and received $8 million in payments in exchange for the company's agreement to purchase $50 million in generic drugs from IVAX. Omnicare also agreed to drive utilization for the generic drugs for their nursing home patients.

Omnicare was also alleged to have paid $50 million to certain nursing home chains in exchange for 15 year contracts with each company to refer nursing home patients to Omnicare for drug purchases.

Pharmacy consultants were provided by Omnicare to long term care facilities throughout the country at below market rates in exchange for an agreement with the facilities to use the company's pharmacy services exclusively for their patients.

Finally, Omnicare is alleged to have solicited and received kickback payments in exchange for an agreement to convince physicians to prescribe Risperdal, an antipsychotic, as an initial drug or in place of competitors' antipyschotic drugs.

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