Omnicare Allegedly Violates the Federal Anti Kickback Statute

Omnicare Incorporated is required to pay $124 million to settle two slander lawsuits claiming Omnicare failed to comply with the federal Anti-Kickback Statute. Omnicare Inc., one of the largest distributors of drugs and other pharmaceutical products to various skilled nursing facilities across the United States, allegedly provided discounts to certain skilled nursing facilities in return for the continuous use of their drugs and pharmaceutical products.  The Anti-Kickback Statute is a criminal statute that is intended to eliminate any exchange of value to generate the referral of federal health care program business.  The allegations against Omnicare smear the legitimacy of the company and may negatively impact future sales of its products.  Although Omnicare denies any wrongdoing, and has agreed to settle the case to “end litigation,” its actions are deemed reprehensible by many.

According to the Washington Post, the “settlement agreement said Omnicare paid skilled-nursing facilities with discounted drug prices and ‘prompt pay discounts,’ . . .” clearly, a violation of the Anti-Kickback Statute.  The alleged actions executed by Omnicare management, to profit from nursing home facilities, have left many stunned.  Omnicare supposedly seized the opportunity to exploit the geriatric community and consequently, “undermined the healthcare system.”

The Anti-Kickback Statute was enacted to protect federal health care programs and patients from abuse and fraud.  It limits the influence of bribery, and instead, directs the attention to the quality of medication and the care that is considered ideal for the patient. The purchase of pharmaceutical supplies should be based solely on the quality of the service, and not just the cost.  If the allegations are true, Omnicare indirectly took advantage of the vulnerable aging population to improve its profits from sales. These allegations are reason enough to assess whether Omnicare has respectable and upright intentions when distributing its pharmaceutical products and services. By allegedly violating the federal Anti-Kickback Statute, Omnicare’s directors and management failed to act with integrity, one of the company’s core values; which specifically states, “We act with honor and do the right thing-for our employees, our customers, our company, and our society.”

As a result of the settlement agreement, Omnicare, Inc. is obligated to pay a total of $124 million; with $116 million apportioned to the United States government, $8.2 million to various states, and $17 million to the Omnicare employee who filed the lawsuit. Although a disappointment for Omnicare, this lawsuit serves to invoke reevaluation within the pharmaceutical industry.  With the large settlement sum being paid to various entities, it serves as a warning for other pharmaceutical companies to prioritize the welfare of their consumers rather than their business profits.

Although the finest quality of care should be a guarantee by every company in the healthcare industry, it is not always a priority. At the Law Offices of Ben Yeroushalmi, we rigorously defend the rights and interests of elder abuse victims and their loved ones. Mr. Yeroushalmi and his staff are extremely knowledgeable and passionate about elder abuse and neglect litigation. If you or a loved one is a victim of elder abuse or neglect, please contact us immediately for a free, no obligation consultation. We will zealously stand up and advocate to protect the rights to which you and your loved one are entitled.