The all new
CBS News App for Android® for iPad® for iPhone®
Fully redesigned. Featuring CBSN, 24/7 live news. Get the App

Kickbacks Keeping Big Pharma Healthy?

The health care giant Omnicare paid the Justice Department a nearly $100 million fine for giving and receiving kickbacks, though Omnicare has admitted no wrongdoing.
CBS
As members of Congress debate healthcare reform - most would agree to a crackdown on those who cheat the system. At least $68 billion is lost to health care fraud every year - and that's considered a conservative estimate.

CBS News chief investigative correspondent Armen Keteyian has more on a staggering fraud case involving health care giant Omnicare.

When it comes to selling drugs to nursing homes and other long-term care facilities across the country, Omnicare has a prescription for success - a market share in excess of 70 percent and more than $6 billion in sales last year alone.

60 Minutes: Medicare Fraud: A $60 Billion Crime


But that success, it appears, came with a strong dose of dishonesty: Today Omnicare agreed to pay nearly $100 million to settle a series of complaints with the Justice Department for paying and receiving kickbacks.

"We will not tolerate the payments of kickbacks that have an influence and affect the choice of drugs prescribed to patients in nursing homes," said Boston U.S. Attorney Michael Loucks.

According to the government, Omnicare allegedly "solicited and received" kickbacks from health care giant Johnson & Johnson in exchange for "agreeing to recommend that physicians prescribe" the company's anti-psychotic drug Risperdal.

And the government alleged Omnicare solicited and received $8 million in kickbacks from drug manufacturer IVAX in exchange for Omnicare's agreement to purchase $50 million in drugs from IVAX.

"Omnicare is a company that has a lot of ethical problems," said Patrick Burns of the group Taxpayers Against Fraud. "This is not the first it has been nailed for fraud by the U.S. government. It is a repeat player in the fraud game."

Omnicare allegedly also paid kickbacks, in one case shelling out $50 million to two nursing home chains in order to keep the chain's pharmacy business worth hundreds of millions of dollars.

As is typical in these cases, Omnicare denied any wrongdoing. But the company was willing to swallow a nearly $100 million pill to make this headache go away.