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Financial Fraud Law

Omnicare Reaches $4.19 Million Settlement of Whistleblower Suit Alleging Kickbacks

 Omnicare Inc., an Ohio-based long term care pharmacy, has agreed to pay the U.S. government $4.19 million to settle allegations that it engaged in a kickback scheme in violation of the federal False Claims Act.  Omnicare provides pharmaceuticals and services to long term care facilities and residents and other senior populations. 

The settlement resolves a lawsuit filed under the qui tam, or whistleblower, provision of the False Claims Act, which allows private citizens with knowledge of false claims to bring civil actions on behalf of the government and to share in any recovery.  The share in this case for the whistleblower, Frank Kurnik, a long time employee of Amgen, is $397,925. 

The complaint alleged that Omnicare solicited and received kickbacks from the drug manufacturer Amgen Inc. in return for implementing “therapeutic interchange” programs that were designed to switch Medicaid beneficiaries from a competitor drug to Amgen’s product Aranesp.  The complaint alleged that the kickbacks took the form of performance-based rebates that were tied to market-share or volume thresholds, as well as grants, speaker fees, consulting services, data fees, dinners and travel. 

The False Claims Act lawsuit was filed in the U.S. District Court for the District of South Carolina and is captioned United States ex rel. Kurnik v. Amgen Inc., et al. It alleged violations by Amgen (which previously settled for $24.9 million), along with pharmacy providers Omnicare, PharMerica and Kindred.  In particular, the complaint alleged that in addition to Omnicare, Amgen conspired with “PharMerica and Kindred to promote Aranesp sales through rebate contracting including targeted programs designed to influence prescriptions of Aranesp in the nursing homes and skilled nursing facilities serviced by these LTCPPs.” 

While the claims against Amgen and Omnicare have now been resolved, the case is proceeding against PharMerica and Kindred. 

“The allegations underlying the claims that were resolved with Omnicare are yet another reminder of how medical decisions impacting vulnerable patient populations are being made at a corporate level for monetary as opposed to medical reasons,” said Reuben Guttman, a partner with Grant & Eisenhofer who represents Kurnik. “Our intent is to vigorously pursue the remaining defendants in this case,” he added. 

Attorneys involved in the case include: Reuben Guttman, Traci Buschner, and Justin Victor of Grant & Eisenhofer and Richard Harpootlian of Richard A. Harpootlian P.A. representing Kurnick; Aaron Katz of Ropes and Gray representing Omni; William N. Nettles, U.S. Attorney; Fran Trapp, AUSA; Jeffrey Wertkin, DOJ; Jay Speers, Counsel to the New York Medicaid Fraud Control Unit, Special Assistant Attorney General Carolyn Ellis, Chief Auditor for Civil Enforcement Michael LaCasse, Associate Special Auditor Investigator Meghan Collins, Acting Director Amy Held of the New York MFCU, Executive Deputy Attorney General for Criminal Justice Kelly Donovan.

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