Pharmacy Pays Medicaid Fraud Settlement, Part of $28 Million Agreement

MASSACHUSETTS—Omnicare, which is the largest institutional pharmacy in the nation, has agreed to pay the Massachusetts Medicaid Program (MassHealth) more than $475,000 to resolve allegations that the company participated in a kickback arrangement and caused the submission of false claims to the state, Attorney General Maura Healey announced on Wednesday.

The payment is part of a $28 million joint state-federal agreement. The agreement with Omnicare Inc. settles claims that the pharmacy giant conspired with pharmaceutical drug manufacturer Abbott Laboratories (Abbott) to engage in a number of disguised kickback arrangements to increase overall use of Depakote, a prescription anticonvulsant drug used to treat epilepsy and bipolar disorder and to help prevent migraine headaches, said the press release. Omnicare will pay a total of $476,216 to MassHealth under the settlement.

“Omnicare’s illegal kickbacks came at the expense of seniors and vulnerable patients,” said AG Healey in a statement. “Corporations that reap illicit profits from MassHealth members and taxpayers will continue to be held accountable by my office.”

Omnicare Inc. was acquired by CVS Health Corporation in August 2015. It provides pharmaceuticals and related pharmacy services to elder care facilities and in other specialized health care settings.

Omnicare of Central Massachusetts is located in Shrewsbury. Omnicare of Northern Massachusetts is located in Peabody.

The states participating in this settlement contend that between January 2001 and December 2008, Omnicare knowingly solicited and received illegal payments from Abbott through agreements that required Omnicare to engage in certain promotional programs, grants, and other financial support, said the announcement. This alleged conduct resulted in false claims to Medicaid and other federally-funded health care programs.

Omnicare will pay the states and the federal government a total of $28.125 million in civil damages to compensate Medicaid, Medicare, and other federal healthcare programs for harm suffered as a result of the alleged conduct. This settlement is based on two whistleblower cases that were consolidated and are pending in the U.S. District Court for the Western District of Virginia, said the press release. The cases were filed under federal and state false claims statutes.

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