October 9, 2015

DOJ Catch of the Week — PharMerica Corp.

By the C|C Whistleblower Lawyer Team

This week’s Department of Justice “Catch of the Week” goes to Kentucky-based PharMerica Corp.  On Wednesday, the nation’s second-largest nursing home pharmacy agreed to pay $9.25 million to resolve allegations it violated the False Claims Act by soliciting and receiving kickbacks from pharmaceutical manufacturer Abbott Laboratories in exchange for promoting the anti-epileptic prescription drug Depakote for nursing home patients.  See DOJ Press Release.

Nursing homes rely on pharmacists, such as those employed by PharMerica, to review their residents’ medical charts and make recommendations to their physicians about what drugs should be prescribed for those residents.  According to the government, PharMerica solicited and received kickbacks from Abbott to promote the drug to nursing home residents.  The kickbacks were allegedly disguised as rebates, educational grants and other financial support.  The settlement is part of the continuing fallout of the $1.5 billion settlement Abbott entered into with the government in May 2012 to resolve Abbott’s liability under the False Claims Act for alleged kickbacks to nursing home pharmacies, including PharMerica.  The settlement announced today resolves PharMerica’s role in that alleged kickback scheme.

In announcing the settlement, the government stressed it will not tolerate healthcare decisions based on profit over medicine, particularly when they involve this most vulnerable part of our population who “have little control over the medications they receive and depend on the unbiased judgment of healthcare professionals for their daily care.”  Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division remarked: “Kickbacks to entities making drug recommendations compromise their independence and undermine their role in protecting nursing home residents from the use of unnecessary drugs.”  US Attorney Anthony P. Giorno of the Western District of Virginia added: “We owe nothing less in fulfilling our duty to ensure that nursing home residents are provided with the appropriate drugs based upon their needs rather than the business interests of the companies providing the drugs.”

The settlement partially resolves allegations raised in two whistleblower lawsuits brought by former Abbott employees Richard Spetter and Meredith McCoyd under the qui tam provisions of the False Claims Act.  Ms. McCoyd will receive a whistleblower award of $1 million from the federal share of the settlement amount.

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