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Post date: October 17 2016

A.G. Schneiderman Announces $28.125M National Healthcare Fraud Settlement With Omnicare Concerning Prescription Drug Depakote

Settlement Resolves Claims That Omnicare Conspired With Drug Maker Abbott Laboratories To Increase Use Of Seizure Medication In Kickback Arrangement

Schneiderman: We Will Fight to Hold Companies Who Abuse Medicaid Accountable

NEW YORK -- Attorney General Eric T. Schneiderman announced today that New York has joined with other states and the federal government and reached agreement with institutional pharmacy Omnicare Inc. (Omnicare) to settle civil allegations that Omnicare conspired with Illinois-based pharmaceutical drug manufacturer Abbott Laboratories (Abbott) to increase overall utilization of the drug Depakote through the use of various disguised kickback arrangements.  Omnicare, acquired by CVS Health Corporation effective August 18, 2015, provides pharmaceuticals and related pharmacy services to long-term care facilities as well as chronic care facilities and other settings. Depakote is approved for treatment of seizure disorders, mania associated with bipolar disorder and prophylaxis of migraines.

The settlement resolves claims by New York and the other states that from January 1, 2001 through December 31, 2008, Omnicare knowingly solicited and received illegal remuneration from Abbott in the form of agreements that required Omnicare to engage in certain promotional programs, grants, and other financial support intended to induce Omnicare to promote and/or purchase Depakote in violation of state anti-kickback statutes and the Federal Anti-Kickback Statute. Omnicare’s alleged conduct resulted in the submission of false claims to Medicaid and other federal healthcare programs.

“The greed and lack of compassion shown by companies that seek to profit at the expense of taxpayers and vulnerable Medicaid patients is reprehensible,” said Attorney General Schneiderman. “We will continue fighting to protect New Yorkers against illegal kickback arrangements, and to hold those who enter into them accountable."

Omnicare will pay the states and the federal government a total of $28.125 million in civil damages to compensate Medicaid, Medicare, and various other federal healthcare programs for harm suffered as a result of its conduct.  This settlement is based on two qui tam cases that were consolidated in the United States District Court for the Western District of Virginia in Abingdon, Virginia.  The cases were filed under federal and state false claims statutes.

The Medicaid portion of the national settlement for the federal government and the states is approximately $7.8 million dollars, of which the State of New York will receive $2,215,295. After deduction of the federal share and relator shares, the State will receive $1,116,983 before interest in restitution and other recovery.

New York, along with the federal government and other states settled related civil and criminal allegations against Abbott in 2012 with New York’s share of that settlement being $50 million dollars, as well as a consumer-related settlement for almost $4 million.

A state team appointed by the National Association of Medicaid Fraud Control Units participated in the investigation and conducted the settlement negotiations with Omnicare on behalf of the participating states.  Team members include representatives from the Offices of the Attorneys General for the states of California, Illinois, Massachusetts, Maryland, New York, Ohio, South Carolina and Virginia.

The Attorney General’s Medicaid Fraud Control Unit led the state’s investigation and represented the state’s interest in the resolution led by Sherrie Brown, Senior Counsel to the Medicaid Fraud Control Civil Enforcement Unit and Special Assistant Attorney General Elizabeth Silverman, Carolyn Pollard, Deputy Director of the Electronic Investigative Support Group, Civil Enforcement Chief Auditor Stacey Millis, Auditor Investigator Tatum Serfilippi and Medical Analyst Stephanie Keyser. MFCU is led by Director Amy Held and Assistant Deputy Attorney General Paul Mahoney. 

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