You've probably never heard of Omnicare (OCR), so you're probably not interested in knowing that the company just paid $21 million to Michigan and Massachussetts to settle allegations that it overcharged Medicaid. But you should be: Omnicare is a massive provider of pharmacy services to old people's homes and senior care facilities, and this settlement is merely the tip of the iceberg.
If there were any justice, Omnicare CEO Joel Gemunder would be squirming under the bright lights of 60 Minutes' cameras, trying to explain the company's various drug price schemes. On his watch, Omnicare has paid out $168.5 million in legal settlements for various kickback schemes it was involved with. Among them:
- A settlement with the federal government for $98 million. On that case, Omnicare was accused of paying $50 million to acquire a business worth no more than $5 million because the $50 million was essentially a kickback to steer pharmacy contracts to Omnicare.
- Omnicare paid $49.5 million to settle charges it switched patients' dosing regimens in order to boost prices and rip off government reimbursers.
- Walgreens (WAG) did the same thing, and settled those allegations for $35 million.
- In the process of executing these schemes, Omnicare also allegedly took kickbacks from Abbott Labs (ABT), Johnson & Johnson (JNJ), AstraZeneca (AZN), Barr Pharmaceuticals (now Teva), Bayer (BAY), Eli Lilly (LLY), GlaxoSmithKline (GSK), Roche (RHHBY), Merck (MRK), Novartis (NVS), Novo Nordisk and Pfizer (PFE) to place their drugs in favorable positions on Omnicare's prescribing lists, according to this lawsuit.
- Johnson & Johnson allegedly added $180 million to its drug sales this way, and the scheme became part of its business model (although some J&J execs expressed ethical doubts about what they were doing).
- One patient under Omnicare's care -- remember, these are very old, sick and vulnerable patients living in care -- was cycled through 67 different drugs to help boost sales.
- Omnicare's Kickback List: Just Because Everyone's Doing It Doesn't Make It Right
- Dumbest PowerPoint Ever? J&J's P&L Slideshow of Alleged Kickback Scheme
- Risperdal Kickback Case: J&J Tried to Freeze Out Lilly; 72% Market Share Not Good Enough!
- Exec in Risperdal Kickback Case: "I Wasn't Going to Jail for J&J"
- J&J Nursing Home Kickback Scheme Tripled Sales, DOJ Alleges
- In Risperdal Kickback Case, One Nursing Home Patient Received 67 Different Drugs