On May 16, 2017, the U.S. Attorney’s Office for the District of New Jersey announced that along with 28 states and the Department of Justice it reached an $8 million settlement with Omnicare Inc. to resolve allegations brought under the False Claims Act.  The allegations were originally brought under the qui tam provisions of the False Claims Act by two former Omnicare pharmacists and alleged that Omnicare implemented an automated label verification system that utilized a less specific drug code than the industry standard and more specific National Drug Code (NDC).  This less specific drug code resulted in Omnicare submitting claims for payment to the government for generic drugs that were different from those actually dispensed to Medicare and Medicaid beneficiaries.  The government also alleged that false manufacturer and NDC information on the labels and within Omnicare’s electronic dispensing information affected Omnicare’s ability to properly track and, if necessary, conduct patient-level recalls of such drugs.

The original whistleblowers in the case, known as relators, are former Omnicare pharmacists and will receive more than $2 million as their share of the government’s recovery.  The False Claims Act allows individuals, such as the relators in this case, to bring allegations that the government has been defrauded in a federal lawsuit and share in any recovery made by the government.  Typically, relators who bring successful cases under the False Claims Act are entitled to 15-30% of the government’s recovery.

CVS acquired Omnicare in 2015 and said in a statement that the false claims which formed the basis of this lawsuit occurred before the acquisition.  Omnicare neither admitted or denied wrongdoing as part of the settlement.

Frohsin Barger & Walthall would like to thank and congratulate the whistleblowers in this case and their counsel for bringing this case to light and on its successful resolution.  We would also like to thank and congratulate the U.S. Attorney’s Office for the District of New Jersey, the FBI, the Department of Health and Human Services, Office of Inspector General and the Department of Justice for prosecuting this case.