PharMerica to Pay $9.25 Million to Resolve Allegations It Took Kickbacks from Abbott Labs

The nation’s second-largest nursing home pharmacy, PharMerica Corp., will pay $9.25 million to resolve allegations that it solicited and received kickbacks from pharmaceutical manufacturer Abbott Laboratories in exchange for promoting the prescription drug Depakote for nursing home patients.

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PharMerica is headquartered in Louisville, Kentucky.

Nursing homes rely on consultant pharmacists, such as those employed by PharMerica, to review their residents’ medical charts at least monthly and make recommendations to their physicians about what drugs should be prescribed for those residents.

The settlement resolves allegations that in exchange for recommending that physicians prescribe Depakote, an anti-epileptic drug manufactured by Abbott, to nursing home residents, PharMerica solicited and received kickbacks from Abbott.

The government alleges that the kickbacks were disguised as rebates, educational grants and other financial support.

In May 2012, the United States, numerous individual states and Abbott entered into a $1.5 billion global civil and criminal resolution that, among other things, resolved Abbott’s liability under the False Claims Act for alleged kickbacks to nursing home pharmacies, including PharMerica.

The settlement resolves PharMerica’s role in that alleged kickback scheme.

Approximately $7.6 million of the settlement will go to the United States, while $2.5 million has been allocated to cover Medicaid program claims by states that elect to participate in the settlement.  The Medicaid program is jointly funded by the federal and state governments.

The settlement partially resolves allegations in two lawsuits filed in federal court in the Western District of Virginia by Richard Spetter and Meredith McCoyd, former Abbott employees.

The lawsuits were filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery.

The act also allows the government to intervene and take over the action, as it did in part in this case.

As part of the resolution, McCoyd will receive $1 million from the federal share of the settlement amount.

 

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