PharMerica Settles False Medicaid Claims for $9.25M; Whistleblower to get $1M
PharMerica Corp., the United States’ second-largest nursing home pharmacy, has agreed to pay $9.25 million to resolve allegations that the company knowingly submitted or caused the submission of false claims to state and federal health care programs, the U.S. Department of Justice announced last week. PharMerica allegedly solicited and received kickbacks from pharmaceutical manager Abbott Laboratories in exchange for promoting the prescription drug Depakote for nursing home patients.
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 announced today 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 announced last week resolves PharMerica’s role in that alleged kickback scheme.
Approximately $6.75 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 today’s resolution, Ms. McCoyd will receive $1 million from the federal share of the settlement amount.
The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments. We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud. Read more about our expertise in False Claims Act cases and how you can take action.