Another day, another drug-marketing settlement. Omnicare, which provides pharmacy services to nursing homes, agreed to pay $98 million to settle allegations that it accepted and asked for kickbacks, the U.S. Justice Department announced. And Teva Pharmaceutical Industries subsidiary IVAX will pay $14 million on claims that it forked over $8 million to induce Omnicare to buy $50 million in drugs.
According to the Justice Department, Omnicare played both sides of the fence, by giving nursing homes kickbacks for patient referrals and by asking for kickbacks from drugmakers. In addition to IVAX, Omnicare allegedly solicited--and got--kickbacks from Johnson & Johnson in return for recommending that doctors prescribe the company's antipsychotic drug Risperdal.
Omnicare, however, says it did no such thing. The company said that it agreed to settle "in order to avoid expensive and time-consuming litigation." And it pointed out that the settlement didn't include a finding of wrongdoing--or any admission of liability by the company, the Wall Street Journal reports.
For J&J's part, the company disclosed in its most recent quarterly report that several pharma-unit employees have been subpoenaed by a grand jury in connection with the Omnicare investigation. Justice plans to decide soon whether to jump into a whistleblower lawsuit that originally raised the Risperdal allegations, according to a court filing quoted by the WSJ. "Today's settlement provides a strong message... to pharmaceutical companies and nursing homes that the government will not tolerate the payment of kickbacks," one of the U.S. attorneys involved in the Omnicare probe said.