Kentucky Joins Healthcare Fraud Lawsuit Against Cincinnati's Omnicare Inc.

This story has been corrected.

Kentucky has joined a multi-state and federal fraud lawsuit against Cincinnati-based Omnicare Inc., alleging that the company billed the state’s Medicaid program almost $6 million over nine years for drugs that were given to nursing home patients for uses not approved by the Food and Drug Administration.

According to papers filed by Attorney General Jack Conway in federal court in Abingdon, Va., Omnicare received “millions of dollars” in kickbacks from Abbott Laboratories for promoting the use of Depakote, an anti-seizure and mood-disorder drug, for dementia patients who were agitated or aggressive. The suit says Omnicare defrauded state Medicaid programs by billing for the illegally administered drugs.

The complaint is Conway’s third kickback case against Omnicare, which moved its headquarters from Covington in 2012. Omnicare spokesman, Patrick Lee, did not return a phone call Monday.

The company paid $98 million in 2009 to settle claims it took kickbacks from drug makers Johnson & Johnson and IVAX. It paid $8.2 million in 2014 to settle claims it paid kickbacks to nursing homes in return for their pharmacy business.

Abbott Labs settled the Virginia case by paying a $1.5 billion settlement in 2012, about $3 million of which went to Kentucky. Another institutional pharmacy operator named in the case, Louisville-based PharMerica, has agreed to settle out of court for an unspecified amount.

The Kentucky Center for Investigative Reporting wrote about the PharMerica settlements last week:
PharMerica Corp., the nation’s second-largest operator of institutional pharmacies, has agreed to settle two federal healthcare fraud lawsuits, one of which accuses the Louisville-based company of taking kickbacks to help expand the misuse of an anti-seizure drug in nursing homes during an 11-year period. The separate settlement agreements, both previously unreported, were disclosed in federal court filings in Abingdon, Va., and Milwaukee in December. Neither agreement has been finalized, and the terms of the settlements were not disclosed.
A spokeswoman for Conway said the attorney general has not yet joined the suit against PharMerica.

Omnicare is the nation’s biggest supplier of drugs to nursing homes. PharMerica is the second-biggest. Both are publicly traded companies.

Reporter James McNair can be reached at jmcnair@kycir.org and (502) 815-6543.

Correction: This story incorrectly reported the amount of money that Omnicare allegedly billed the state’s Medicaid program. The alleged amount is almost $6 million over nine years.