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Omnicare And Ivax Pay Vermont Nearly $50,000 To Settle Allegations Of Fraud

CONTACT: Edward A. Baker, Assistant Attorney General, 802-828-5551

May 7, 2010

Attorney General William H. Sorrell announced today that Vermont received $47,000 in restitution as part of 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. Omnicare is a Delaware corporation headquartered in Kentucky that specializes in providing pharmacy services to long term care facilities. IVAX Pharmaceuticals, Inc. is a Florida corporation that manufactures generic drugs. Vermont joined with other states and the federal government to reach a total of $112 million in civil damages to compensate Medicaid and Medicare programs for harm suffered as a result of the companies' conduct. Vermont Medicaid received its proportioned share of the settlement last week.

The government entities alleged that Omnicare and the other entities 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.
  • As one of the conditions of the settlement, Omnicare and IVAX also entered into Corporate Integrity Agreements with the Office of the Inspector General of the United States Department of Health and Human Services ("HHS-OIG"), which will closely monitor the companies' practices going forward.

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