On October 7, 2015, the Department of Justice announced that PharMerica Corporation (“PharMerica”), the nation’s second-largest nursing home pharmacy, agreed to pay $9.25 million to resolve allegations that it received kickbacks from pharmaceutical manufacturer Abbott Laboratories in exchange for promoting the prescription drug Depakote for nursing home patients. PharMerica is based in Louisville, Kentucky. 

The government alleges that PharMerica violated the Anti-Kickback Statute by soliciting and receiving kickbacks from Abbott in exchange for recommending that physicians prescribe Depakote, an anti-epileptic drug, to nursing home residents. According to the government’s theory, PharMerica disguised the kickbacks as rebates, educational grants, and other financial support. Nursing homes rely upon pharmacists, such as those at PharMerica, to make recommendations about what drugs should be prescribed to their residents. 

As noted by Deputy Assistant Attorney General Benjamin Mizer, “[e]lderly nursing home residents suffering from dementia have little control over the medications they receive and depend on the unbiased judgment of healthcare professionals for their daily care. Kickbacks to entities making drug recommendations compromise their independence and undermine their role in protecting nursing home residents from the use of unnecessary drugs.” 

The settlement partially resolves two qui-tam, or whistleblower, lawsuits filed in the Western District of Virginia by former Abbott employees. Approximately $6.75 million of the settlement will go to the United States, $2.5 million will go to cover Medicaid program claims by states that elect to participate in the settlement, and the remaining amount will be paid to the whistleblowers. “The settlement announced today should serve as a stark reminder to pharmaceutical companies and those with whom they do business that the Department of Justice and its investigative agencies will continue to monitor their activities,” stated U.S. Attorney Anthony Giorno, of the Western District of Virginia.

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PharMerica Corporation Settles Anti-Kickback Allegations by Paying Over $9 Million to Government