< Back to Previous Page

Omnicare, Inc. to Pay $49.5 Million to Settle Medicaid Prescription Fraud Allegations

The United States and 43 states will receive $49.5 million from Omnicare, Inc., of Covington, Kentucky, to settle Medicaid prescription-drug-fraud claims initiated by two whistleblowers, federal and state officials announced today. Omnicare, the largest provider of pharmacy services to skilled nursing facilities and assisted living communities in the United States, allegedly substituted different versions of prescribed drugs (such as tablets for capsules) solely to significantly increase the cost and profit rather than for any legitimate medical reason. The settlement covers Omnicare’s submission of reimbursement claims to Medicaid programs in 43 states for three prescription drugs from April 2000 through 2005: Ranitidine (generic Zantac), Fluoxetine (generic Prozac) and Buspirone (generic Buspar).

Under the agreement, within 10 business days Omnicare will pay the United States slightly more than $29,641,000 as the federal share of settlement and it will pay a total of approximately $19,858,782 to be apportioned among the participating state Medicaid programs. Separate settlement agreements establish the amounts owed to each state. The State of Illinois, for example, will receive a net of $2,568,762.

The universal federal settlement covers allegations that, for each of the three drugs, Omnicare improperly switched Medicaid patients from a cheaper version of the drug to a more expensive version solely to increase its reimbursement rate. Medicaid patients were given Ranitidine capsules instead of the cheaper tablets, Fluoxetine tablets instead of the cheaper capsules, and two 7.5-mg. tablets of Buspirone instead of the cheaper, single 15-mg. tablet. Those switches increased prices substantially while adding no medical benefit and violating federal and state regulations. For example, by substituting Ranitidine capsules for the 150-mg. tablets that were prescribed between December 15, 2000 and April 1, 2001, Omnicare was able to charge Illinois Medicaid $79.80 instead of $17.10 per 60 tablet prescription for a difference of $62.70.

Omnicare made some of these switches without specifically informing the prescribing doctor of the change in drug form, sometimes falsely telling the physician that the new version of the drug would be cheaper for the payer, and other times suggesting some undefined patient benefit from the new form of the drug. Nevertheless, according to the allegations, Omnicare’s sole reason for each switch was to increase the amount of reimbursement it would receive from Medicaid for each prescription.

These are serious consequences to suffer due to the negligence of medical professionals. Contact us if you or anyone you know have experienced any kind of medical negligence.

Get Immediate Legal Assistance