At issue: The antipsychotic drug Risperdal & fair market value.
Last week, the Department of Justice announced that nation’s largest nursing home pharmacy, Omnicare Inc., will pay $98 million to settle False Claims Act allegations. IVAX Pharmaceuticals (now a subsidiary of Teva Pharmaceuticals) will pay $14 million to settle allegations regarding its role in the kickback scheme. Now two large nursing home chains — and their principles — are facing kickback allegations for their roles, according to a DOJ release.
The DOJ “has intervened and filed a complaint against two large nursing home chains, Mariner Health Care Inc. and SavaSeniorCare Administrative Services LLC, both of Atlanta, and their principals, Leonard Grunstein, Murray Forman, and Rubin Schron, for accepting a kickback from Omnicare in return for pharmacy services contracts,” says the release.
Background on the Omnicare settlement: The Johnson & Johnson (J&J) antipsychotic Risperdal is the drug at issue, and the case just settled involved Omnicare accepting kickbacks from J&J to recommend that physicians prescribe Risperdal.
Why the SNFs are in the hot seat …
As this was going on, Omnicare was paying kickbacks to Mariner and SavaSeniorCare to induce them to refer their SNF patients to Omnicare for pharmacy services, prosecutors allege. The kickbacks took the form of Omnicare providing consultant pharmacy services for the nursing homes at far below fair market value.
FMV is the smoking gun in another action: The DOJ also alleges that “Omnicare, Mariner Health Care, SavaSenior Care, Grunstein, Forman, and Schron conspired to arrange for Omnicare to pay the nursing home chains $50 million in exchange for the right to continue providing pharmacy services to the nursing homes, which together constituted one of Omnicare’s largest customers,” the DOJ release says. According the the complaint, the conspirators set up a $50 million acquisition of a small, 2-employee Mariner Health Care business unit that was worth far less than $50 million.
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