South Carolina to Receive Settlement Funds for Nursing Home Prescription Drug Kickback Case

Anti-pyschoticGreenville, SC- Omnicare, an Ohio-based company that provides prescription drugs for nursing homes and long-term care facilities in South Carolina and 47 other states and drug-company Amgen, agreed to pay $4.2 million to settle a pharmaceutical kick-back case.

The original case was brought forward in a U.S. District Court in South Carolina after a whistleblower came forward with allegations against drug-manufacturer Amgen, and pharmacy providers Omnicare, PharMerica, and Kindred. The suits against Kindred and PharMerica are still pending.

In the suit, whistleblower Frank Kurnik alleged that between 2003 and 2005 Omnicare received kickbacks in the form of discounts, market-share rebates, grants, speaker fees, consulting services, dinners, travel or fees for the purchase of data in exchange for encouraging nursing homes and long-term care facilities to use Aranesp, a drug used to ease the symptoms of cancer and kidney failure.

Omnicare also set a switching-program which helped nursing homes change residents from a competitive drug to Aranesp.

The lawsuit alleged Omnicare and Amgen defrauded the Center for Medicare and Medicaid Services but the two companies did not admit liability by agreeing to the settlement.

“Whether patients are treated by physicians, in nursing homes or in long-term-care facilities, prescription drugs should be dispensed based on medical necessity – not on side deals for pharmaceutical companies to gain market share in a captive patient population,” New York Attorney General Schneiderman said in a press statement announcing the settlement. “My office will hold accountable those entities that subvert patients’ and their medical professionals’ judgment by such actions.”

The $4.2 million settlement will be divided among several states including Medicaid programs in South Carolina and 47 other states.

This is Omnicare’s second settlement for a kickback case. Last year, Omnicare along with Johnson & Johnson paid $2.2 billion dollars to settle similar allegations. Johnson & Johnson gave Omnicare bonuses, market-share rebates and other benefits for encouraging nursing homes and long-term care facilities to prescribe the anxiety drug Risperdal which can be deadly for the elderly and Alzheimer’s patients.

This recent $4.2 million and last year’s $2.2 billion settlement are demonstrative of the DOJ’s increased efforts to crackdown on fraud perpetrated by pharmaceutical companies and to reduce Medicare and Medicaid fraud. Over the past few years, the DOJ has recovered $17 billion from healthcare and pharmaceutical companies under the False Claims Act.

The frivolous use of drugs is a regular occurrence in South Carolina nursing homes. Drugs are utilized as an effective way to keep some patients under control. There are some patients who must be “chemically restrained,” because they are combative but the majority of nursing home residents shouldn’t be given these potentially dangerous drugs. This can be seen as neglect and if the chemical restraint is used against a patient’s or their families’ will, a South Carolina nursing home abuse attorney can help that family seek compensation for the harm they have endured.