Ken Paxton

AG Paxton: Settlement Reached with Omnicare in Healthcare Fraud Lawsuit

Wednesday, October 19, 2016 – Austin

Attorney General Ken Paxton today announced that Texas, joined by other states and the federal government, has reached an agreement with Omnicare Inc. (Omnicare) to settle civil allegations that Omnicare conspired with Abbott Laboratories to increase overall utilization of Depakote—an anti-convulsant medication. Omnicare will pay the states and the federal government a total of $28.125 million in civil remedies to compensate Medicaid, Medicare and various federal healthcare programs for harm suffered as a result of its conduct. As part of the settlement, the State of Texas will receive $234,974.86 for civil remedies.

The states alleged that Omnicare, a consultant pharmacy provider for nursing homes and long-term care facilities, accepted kickbacks from Abbott Laboratories to increase the utilization of Depakote for other, non-FDA approved uses. Omnicare recommended that Depakote be used for the off-label treatment of behavioral disorders and symptoms often associated with dementia, like agitation and aggression. From January 2001 through December 2008, Omnicare knowingly received illegal payments, grants, and other financial support from Abbott Laboratories to engage in certain promotional programs to physicians designed to increase the use of Depakote.  This alleged conduct resulted in false claims to Medicaid and other federal healthcare programs. The receipt or payment of kickbacks is an unlawful act under several provisions of the Texas Medicaid Fraud Prevention Act.   

In 2010 a whistleblower filed a civil lawsuit on behalf of the federal government and other states against Omnicare, which was later consolidated with a separate whistleblower suit against Abbott Laboratories. A state team appointed by the National Association of Medicaid Fraud Control Units participated in the investigation and conducted settlement negotiations with Omnicare on behalf of the participating states. Team members include representatives from the Offices of the Attorneys General for the states of California, Illinois, Massachusetts, Maryland, New York, Ohio, South Carolina and Virginia.