2nd UPDATE: DOJ:Omnicare, Teva Unit To Pay In Kickbacks Case
(Updates with comment from Johnson & Johnson and Teva, and includes additional
detail on the status of a lawsuit against J&J.)
By Brent Kendall
Of DOW JONES NEWSWIRES
WASHINGTON -(Dow Jones)- Geriatric pharmacy company Omnicare Inc. (OCR) will
pay $98 million to settle charges that it engaged in several kickback schemes
with drug makers and nursing homes, the U.S. Justice Department announced
Tuesday.
The department also said IVAX Pharmaceuticals, a unit of Teva Pharmaceutical
Industries Ltd. (TEVA), will pay $14 million to settle allegations that it paid
$8 million in kickbacks in exchange for Omnicare's agreement to buy $50 million
worth of IVAX drugs.
The Justice Department alleged that Omnicare regularly paid kickbacks to
nursing homes in order to induce the homes to refer their patients to Omnicare
for pharmacy services.
Department lawyers also said Omnicare solicited and received kickbacks from
Johnson & Johnson (JNJ) in exchange for agreeing to recommend that doctors
prescribe J&J antipsychotic drug Risperdal.
Omnicare's alleged actions caused false claims to be submitted to Medicare,
Medicaid and other federal health care programs, the department said.
Omnicare disputed the government's allegations in a written statement and said
the settlement does not include any finding of wrongdoing or any admission of
liability by the company.
"The company agreed to settle the matters in order to avoid expensive and
time-consuming litigation and to focus on its mission of providing high-quality
pharmaceutical care for the frail elderly," Omnicare said.
A Johnson & Johnson spokeswoman who fielded questions about the case referred
to the company's most recent quarterly report, in which it said several
employees of its pharmaceutical subsidiaries have been subpoenaed to testify
before a grand jury in connection with the investigation. The Justice
Department said in a two-page court filing Tuesday that it expects to make a
decision soon on whether to intervene in a lawsuit that made the allegations
against Johnson & Johnson.
Teva spokeswoman Denise Bradley said IVAX denied any liability in the case but
settled to avoid the uncertainty and expense of litigation.
Separately Tuesday, the Justice Department said it was intervening in a
lawsuit alleging that two nursing-home chains, Mariner Health Care Inc. and
SavaSeniorCare Administrative Services, accepted kickbacks from Omnicare in
return for pharmacy-service contracts.
The Omnicare case originated with five lawsuits filed by individuals who
reported the alleged wrongdoing under a federal law that provides financial
rewards to litigants who report false claims made against the government.
-By Brent Kendall, Dow Jones Newswires; 202-862-9222; brent.kendall@
dowjones.com
(END) Dow Jones Newswires
11-03-091603ET
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