DOJ: News Release

Bullock: Drug Companies Reimburse State $50,000 for Alleged Kickback Schemes

HELENA – The State treasury recently received $50,000 in Medicaid restitution and penalties as part of settlements negotiated between the National Association of Medicaid Fraud Control Units, nursing home pharmacy Omnicare, Inc. and IVAX Pharmaceuticals, Inc., Attorney General Steve Bullock said Wednesday.

Omnicare Inc. of Covington, Kentucky, is the nation’s largest nursing home pharmacy. IVAX Pharmaceuticals of Weston, Florida, manufactures, sells and markets generic drugs. The settlements are based on five separate lawsuits related to state and federal false claims statutes, alleging that Omnicare and others engaged in several unlawful kickback schemes that included the following:

•Omnicare solicited and received $8 million in payments in exchange for the company’s agreement to purchase $50 million in generic drugs from IVAX Pharmaceuticals and to drive utilization for the generic drugs for their nursing home patients.
•Omnicare 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 the patients’ drug purchases.
•Omnicare provided pharmacy consultants to long-term care facilities throughout the country at below market rates in exchange for the facilities’ agreement to use the company’s pharmacy services exclusively for their patients.
•Omnicare solicited and received kickback payments in exchange for the company’s agreement to convince physicians to prescribe the antipsychotic drug, Risperdal as an initial drug or in place of competitors’ antipsychotic drugs. Risperdal is an antipsychotic drug manufactured by Johnson & Johnson.
“Many elderly patients in nursing homes suffer from Alzheimer’s Disease or dementia and have virtually no control over the drugs they are given,” Bullock said. “To have a pharmacy using bribes and kickbacks, and pushing certain drugs to line its pockets, puts profits over patient care. This is unacceptable.”
The amounts Montana received were proportionate to its Medicaid drug utilization in the IVAX and Risperdal cases, and to Montana Medicaid payments to Omnicare.
The settlements cover only Medicaid damages and do not contain releases for consumer damages. A team representing the National Association of Medicaid Fraud Control Units, of which the Montana Medicaid Fraud Control Unit is a member, conducted settlement negotiations with Omnicare on behalf of the participating states.
Omnicare
Settlement Amount: Total Medicaid Settlement (State/Federal) $142,864.76
State Share of Medicaid Restitution $22,663.87
State Share of Additional Recoveries $13,316.65
Interest $844.83
Total State Settlement Amount $36,825.34
IVAX Pharmaceuticals
Settlement Amount: Total Medicaid Settlement (State/Federal) $52,993.93
State Share of Medicaid Restitution $9,754.81
State Share of Additional Recoveries $3,170.60
Interest $296.24
Total State Settlement Amount $13,221.66

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