Omnicare, Inc. and IVAX Pharmaceuticals, Inc. Agree to Pay $1.1 Million to WI Medicaid to Settle Allegations of Fraud

MADISON - Attorney General J. B. Van Hollen announced today that Wisconsin has joined with other states and the federal government and reached an agreement with Omnicare, Inc. and IVAX Pharmaceuticals, Inc. to settle allegations that the companies engaged in unlawful kickback schemes that defrauded federal and state healthcare programs.  The agreement calls for payment of over $1.1 million in restitution to the Wisconsin Medicaid program. 

Omnicare is a Delaware corporation headquartered in Covington, Kentucky that specializes in providing pharmacy services to long term care facilities.  IVAX Pharmaceuticals, Inc. is a Florida corporation headquartered in Weston, Florida that manufactures generic drugs.  The settlements are based on an investigation that resulted from five separate qui tam lawsuits filed by private individuals and consolidated in the United States District Court for the District of Massachusetts under the state and federal false claims statutes.  Wisconsin was named as a co-plaintiff state in one of the suits. 

The government entities alleged that Omnicare and others engaged in several unlawful kickback schemes that included the following: 

• Omnicare solicited and received $8 million in payments in exchange for the company's agreement to purchase $50 million in generic drugs from IVAX Pharmaceuticals and to drive utilization for the generic drugs for their nursing home patients. 
• Omnicare paid $50 million to certain nursing home chains in exchange for 15-year contracts with each company to refer nursing home patients to Omnicare for the patients' drug purchases. 
• Omnicare provided pharmacy consultants to long term care facilities throughout the country at below market rates in exchange for the facilities' agreement to use the company's pharmacy services exclusively for their patients. 
• Omnicare solicited and received kickback payments in exchange for the company's agreement to convince physicians to prescribe the antipsychotic drug Risperdal as an initial drug or in place of competitors' antipsychotic drugs. 

Van Hollen noted that Wisconsin Medicaid is a jointly funded federal and state program to provide medical assistance to the state's neediest residents.  By pursuing this settlement, the state program will directly recover $1,133,429.08 in restitution as its share of the $2,637,282.90 attributable to Wisconsin Medicaid; the remainder will be returned to the federal government. 

"I'm committed to the protection of resources used to fund government services.  We won't allow schemes like this to waste hard earned taxpayer dollars," said Van Hollen.  "By aggressive enforcement we can get the most from scarce resources and still provide needed services."