Omnicare

Omnicare is an American company working in the health care industry. It was established in April 1981 as a spinoff of healthcare businesses from Chemed and W. R. Grace and Company. It is currently a pharmacy specializing in nursing homes.[1] In 2015, Omnicare was acquired by CVS Health.

Omnicare, Inc.
TypeSubsidiary
IndustryPharmacy
FoundedApril 1981 (1981-04)
Headquarters
Cincinnati, Ohio
,
USA
ParentCVS Health
Websitehttp://www.omnicare.com/
The New York Stock Exchange building on September 1, 2011 with an Omnicare banner marking the 30th anniversary of the company's public listing.

Controversy

In 2012, the Federal Trade Commission (FTC) sued Omnicare to block its hostile takeover of its rival PharMerica under federal anti-trust law. The FTC alleged that the acquisition would boost drug costs and inflate Medicare expenditures by consolidating the industry and reducing price competition.[2] PharMerica owned 97 long-term-care pharmacies, while Omnicare owned approximately 200. The merger would have given Omnicare a 57% marketshare versus two percent for its nearest, non-PharMerica rival.[3] Because of the FTC opposition, the takeover was terminated.

In November 2009, Omnicare paid US$98,000,000 to the federal government to settle five "qui tam" (whistleblower) lawsuits and government charges that the company had paid or solicited a variety of kickbacks.[4] The company admitted no wrongdoing.[5] The charges included allegations that Omnicare solicited and received kickbacks from a pharmaceutical manufacturer Johnson & Johnson, in exchange for agreeing to recommend that physicians prescribe Risperdal, a Johnson & Johnson antipsychotic drug, to nursing home patients.

Starting in 2006, healthcare entrepreneur Adam B. Resnick sued Omnicare, a major supplier of drugs to nursing homes, under the False Claims Act, as well as the parties to the company's illegal kickback schemes. Omnicare allegedly paid kickbacks to nursing home operators in order to secure business, which constitutes Medicare and Medicaid fraud. Omnicare allegedly had paid $50 million to the owners (Leonard Grunstein and Rubin Schron) of the Mariner Health Care Inc. and SavaSeniorCare Administrative Services LLC nursing home chains in exchange for the right to continue providing pharmacy services to the nursing homes.[6]

In 2010, Omnicare settled Resnick's False Claims Act suit that had been taken up by the U.S. Department of Justice by paying $19.8 million to the federal government, while Mariner and SavaSeniorCare settled for $14 million.[7][8]

A second whistleblower lawsuit filed against Omnicare it by Resnick and Total Pharmacy Services V.P. Maureen Nehls related to kickbacks that were part of its 2004 acquisition of Total Pharmacy Services was settled for $17.2 million by Omnicare and $5 million by the Total Pharmacy owners. Reportedly Omnicare was set to acquire JobMinglr.com for an undisclosed sum.[9]

Notes
  1. Timeline: Omnicare 'a mess in spite of itself'
  2. "FTC Sues to Block Omnicare's Bid to Buy Rival Pharmacy Provider PharMerica; Deal Would Lead to Higher Costs for Medicare Patients and Taxpayers, Agency Alleges" (Press release). Katz, Mitchell J. (media contact). Federal Trade Commission. 27 January 2012. FTC File No. 111-0239. Retrieved 12 September 2013.CS1 maint: others (link)
  3. Staff (2 February 2012). "FTC blocks Omnicare acquisition of PharMerica". Drug Topics. New Jersey, USA: UMB Advanstar. Retrieved 12 September 2013.
  4. "Nation's largest nursing home pharmacy and drug manufacturer to pay $112 million to settle false claims act cases" (Press release). United States Department of Justice. 3 November 2009.
  5. Hilzenrath, David S. (16 January 2010). "Justice suit accuses Johnson & Johnson of paying kickbacks". Wash. Post. Retrieved 17 January 2010.
  6. U.S. Department of Justice (March 4, 2009). "Complaint of the United States in the District Court of Massachusetts CA No. 06-10149 RGS" (PDF).
  7. Ameet, Sachdev. "Scheme's victims Scheme's victims seeking restitution FDIC could get most of payment; FDIC could get most of payment". Chicago Tribune. Retrieved 12 September 2013.
  8. "Prominent New York City Real Estate Investor, Attorney and Atlanta Nursing Home Chains Pay $14 Million to Settle Whistleblower Kickback Case". PR Newswire. Retrieved 12 September 2013.
  9. Jackson, David & Gary Marx (6 August 2013). "Nursing home execs agree to pay $5 million to settle suit". Chicago Tribune. Retrieved 12 September 2013.
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