Feds Say Kickbacks Paid to Increase use of Risperdal, Levaquin at Omnicare Nursing Home Change

Jan 18, 2010 | Parker Waichman LLP

Johnson & Johnson has been charged with paying kickbacks to the Omnicare nursing home chain in order to increase the use of its drugs at the chain's homes.  While Johnson & Johnson was allegedly paying kickbacks, federal prosecutors claim that Omnicare’s annual purchases of the company's drugs, including Risperdal and Levaquin,  nearly tripled to more than $280 million.

In November, Omnicare agreed to pay $98 million to settle charges related to the alleged Johnson & Johnson kickback scheme. As part of the settlement, Omnicare entered into a corporate integrity agreement with the Department of Health and Human Services.

According to allegations contained in a complaint filed by the U.S. Attorneys office in Boston, from 1999 to 2004 Johnson & Johnson paid kickbacks to Omnicare in a variety of forms, including rebates, grants and educational funding. The claims against Johnson & Johnson were initiated by whistleblowers who could receive a share of any money the government collects.

The complaint charges that Johnson & Johnson was aware that Omnicare pharmacists made recommendations to physicians about what drugs should be prescribed to home residents. The complaint repeatedly mentions internal Johnson & Johnson e-mails and statements detailing the relationship with Omnicare. The government claims that those documents show that Johnson & Johnson came to see Omnicare pharmacists as an extension of its sales force.

Prosecutors allege that Johnson & Johnson’s conduct caused false or fraudulent claims to be filed with Medicaid, the public health program for the poor and disabled.