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Nation’s largest nursing home pharmacy settles qui tam suit

The U.S. Dept. of Justice announced on November 3, 2009 that the nation’s largest nursing home pharmacy, Omnicare Inc., will pay $98 million, and drug manufacturer, IVAX Pharmaceuticals of Weston, Florida, will pay $14 million to resolve allegations that Omnicare engaged in kickback schemes with several parties, including IVAX.

The company allegedly received kickbacks from Johnson & Johnson in exchange for recommending that physicians prescribe Risperdal, a J&J antipsychotic drug, to nursing home patients. J&J’s kickbacks to Omnicare took multiple forms, including rebates, payments disguised as data purchase fees, educational grants, and fees to attend Omnicare meetings. It was also alleged that Omnicare regularly paid kickbacks to nursing homes by providing below market rate consultant pharmacist services in order to induce the homes to refer their patients to Omnicare for pharmacy services.

One of the whistleblowers in the case, Adam Resnick, was represented by lawyers from Phillips & Cohen LLP.

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