Depakote Kickback Scheme Leads to $28M Settlement Between Omnicare, Justice Dept.

Omnicare, Inc. has agreed to pay more than $28 million to settle charges by the U.S. Department of Justice that it received kickbacks from Abbott Laboratories for promoting the sale of the anti-seizure drug Depakote in nursing homes nationwide. 

The company is the country’s largest nursing home pharmacy, and was accused of hiding the illegal payments from Abbott as grants and educational funding, in return for pushing Depakote on nursing home patients, even when it may not have been needed, according to a Justice Department press release issued on Monday.

“Every day, elderly nursing home residents suffering from dementia rely on the independent judgment of our nation’s healthcare professionals for their personal care and their medical treatment,” Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Department of Justice’s Civil Division., said in the press release. “Kickbacks to entities making drug recommendations compromise their independence and undermine their role in protecting nursing home residents from the use of unnecessary drugs.”

According to the Justice Department, nursing homes often turn to consultant pharmacists for decisions on drug prescriptions, expecting them to be impartial. Instead, according to the charges, what they got from Omnicare were its consultant pharmacists recommending Depakote in exchange for kickbacks from Abbott Laboratories, Depakote’s manufacturer.

According to U.S. investigators, Abbott paid for Omnicare management to go to meetings on islands, gave them sporting event tickets, and took part in an Omnicare program called Re*View, which the pharmacy company described as an educational program, but which investigators say was used to solicit kickbacks.

The Depakote settlement came as a result of whistleblower lawsuits filed by two former Omnicare employees. About $20.3 million of the settlement funds will go to the U.S. government, and another $7.8 million will go to state Medicaid programs. One of the former employees, Meredith McCoyd, will receive about $3 million from the money paid to the U.S. as part of the qui tam provisions of the False Claims Act.

This is not the first time Omnicare has been involved in an alleged kickback scheme, with the company facing a string of litigation over the last dozen years. In November 2013, an investigation into an alleged kickback scheme involving Omnicare, Johnson & Johnson, and the drug Risperdal resulted in Johnson & Johnson paying $2.2 billion to settle illegal marketing claims.

Depakote was approved in the United States in 1978 for treatment of certain forms of epilepsy, containing the active ingredient valproic acid. Before the drug’s patent expired in 2007, Depakote was a blockbuster drug generating about $1.5 billion in annual sales for AbbVie’s predecessor. In France and some other countries the drug is known as Depakene.

In the U.S., the drug is distributed by AbbVie and Abbott Laboratories. In France, it is distributed by Sanofi.

Abbott Laboratories and AbbVie, a subsidiary it spun off, have faced hundreds of Depakote lawsuits in state and federal courts nationwide over failure to warn about certain risks associated with the drug, including developmental problems among children born to women who used the medication during pregnancy.