by Ben Vernia | October 16th, 2015
On October 7, the Department of Justice announced that the long-term care pharmacy PharMerica has agreed to pay $9.75 million to settle allegations that the company received kickbacks from Abbott Laboratories to incentivize the use of its anticonvulsant drug, Depakote, in nursing home patients. According to DOJ’s press release:
The nation’s second-largest nursing home pharmacy, PharMerica Corp., has agreed to pay $9.25 million to resolve allegations that it solicited and received kickbacks from pharmaceutical manufacturer Abbott Laboratories in exchange for promoting the prescription drug Depakote for nursing home patients. PharMerica is headquartered in Louisville, Kentucky.
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Nursing homes rely on consultant pharmacists, such as those employed by PharMerica, to review their residents’ medical charts at least monthly and make recommendations to their physicians about what drugs should be prescribed for those residents. The settlement announced today resolves allegations that in exchange for recommending that physicians prescribe Depakote, an anti-epileptic drug manufactured by Abbott, to nursing home residents, PharMerica solicited and received kickbacks from Abbott. The government alleges that the kickbacks were disguised as rebates, educational grants and other financial support.In May 2012, the United States, numerous individual states and Abbott entered into a $1.5 billion global civil and criminal resolution that, among other things, resolved Abbott’s liability under the False Claims Act for alleged kickbacks to nursing home pharmacies, including PharMerica. The settlement announced today resolves PharMerica’s role in that alleged kickback scheme.
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Approximately $6.75 million of the settlement will go to the United States, while $2.5 million has been allocated to cover Medicaid program claims by states that elect to participate in the settlement. The Medicaid program is jointly funded by the federal and state governments.
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DOJ announced that the case partially settles two qui tam suits brought by former Abbott employees in the Western District of Virginia. One of those, DOJ announced, will receive $1 million of this settlement (approx. 15% of the federal portion of the settlement). DOJ did not announce the other’s relator share, if any.