Omnicare will pay more than $28 million to resolve allegations that the drug distributor accepted kickbacks for pushing an anti-seizure medication on doctors treating nursing home patients.
The Department of Justice said Monday that the deal resolves claims that Omnicare sought and received the kickbacks from drugmaker Abbott Laboratories several years ago for sales of the drug Depakote. Omnicare runs the nation's largest nursing home pharmacy and was purchased last year by drugstore giant CVS Health Corp.
The DOJ says the kickbacks undermined the role of medical personnel in putting the health of patients first and protecting them from unnecessary drug use.
The kickbacks were disguised in a variety of ways, according to federal officials, including as payments from Abbott that were described as "grants" and "educational funding."
CVS Health spokesman Mike DeAngelis said in an email that all the allegations occurred before his company bought Omnicare. He added that CVS Health agreed to settle the case to avoid the expense and uncertainty that comes with a lengthy legal battle.
An Abbott representative said the drugmaker resolved its case with the DOJ in 2012.
That year, Abbott agreed to pay the government a $700 million criminal fine and forfeiture for promoting Depakote, approved for bipolar disorder and epilepsy, for use in patients with dementia and autism. That was on top of civil settlements with numerous states and the federal government totaling $800 million.
About $20.3 million from the settlement announced Monday will go to the federal government. Former Abbott employee Meredith McCoyd will receive $3 million of that after filing a lawsuit under a whistleblower provision of the False Claims Act that permits individuals to sue on behalf of the federal government and then share in any recovery.
Approximately $7.8 million from the settlement will go to the state and federally funded Medicaid program, which covers nursing home care.
Omnicare has spent hundreds of millions of dollars resolving kickback litigation in recent years. In 2014, it agreed to pay more than $124 million to settle lawsuits alleging it gave kickbacks to some facilities so they would keep the company as their drug provider for elderly Medicare and Medicaid recipients.
In 2009, Omnicare said it would pay $98 million to settle allegations that it solicited or paid a variety of kickbacks. That included an accusation that it received kickbacks from Johnson & Johnson for recommending that doctors prescribe to nursing home patients the antipsychotic Risperdal, which can hasten death in elderly people with dementia.
Woonsocket, Rhode Island-based CVS paid more than $10 billion for Omnicare in a deal that gave it national reach in dispensing prescription drugs to assisted living and skilled nursing homes, long-term care facilities, hospitals and other care providers. CVS Health also runs prescription drug coverage for employers and other big clients as one of the nation's largest pharmacy benefits managers.
Shares of the nation's second-largest drugstore chain dropped more than 2 percent, or $2.14, to $86.66 while broader indexes dipped slightly.