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Alleged Depakote kickback scheme lands Kentucky-based nursing home drug supplier in trouble with DOJ

Depakote kickback

According to a press release issued by the United States Department of Justice, the second-largest nursing home pharmacy in the nation – Louisville-based PharMerica Corporation – has agreed to pay some $9.25 million in a settlement of various claims arising from its alleged participation in a Depakote kickback scheme.

According to the company’s website, the “voluntary civil settlement” related to its possible violations of the False Claims Act and/or the Anti-Kickback Statute from 2001 to 2008. The company, which primarily serves institutional health care providers like nursing homes, stated that it was “pleased to resolve this matter” and “remains focused on operating with integrity.”

The Government’s Statement About alleged Depakote kickback scheme

The justice department said that the settlement revolved around PharMerica’s alleged solicitation by, and kickbacks from, Abbott Laboratories. According to the press release by the department, Abbott has been accused of providing kickbacks to PharMerica in exchange for PharMerica’s promotion of a certain drug.

The drug at issue was Depakote (divalproex sodium), which is used to treat bipolar disorder, seizures, and migraines. Known side effects of Depakote include liver damage, inflammation of the pancreas, and suicidal thoughts.

The Justice Department’s press release stated that PharMerica’s alleged conduct was of particular concern because nursing home patients have little control over which medication they are given, and nursing homes themselves rely on consultant pharmacists (like those who work for PharMerica) to review patients’ charts and make recommendations.

The kickbacks that gave rise to the settlement were, according to the government, “disguised as rebates, educational grants, and other financial support.”

Earlier Claims and Proceedings

Three years ago, Abbott Laboratories agreed to pay $1.5 billion for its participation in the scheme. The charges against Abbott were both civil and criminal and involved claims by both the federal government and several states.

With regard to the current settlement by PharMerica, $6.75 million will go to the federal government, with the remaining monies to be allocated to claims made by several states concerning Medicare payments.

The litigation against Abbott arose in large part due to qui tam actions (“whistleblower” lawsuits) filed against it in the U.S. District Court for the Western District of Virginia by two former employees. The False Claims Act allows private individuals, such as employees or former employees, to file suit on the government’s behalf. The government then has the option of intervening in the action, with the whistleblower receiving a portion of the settlement or judgment proceeds.

As stated in the press release by the justice department, there was no formal determination of liability in the case, and all claims resolved by the settlement are allegations only.

To Get Legal Advice About Your Pharmaceutical Injury Case

If you or a loved one has a possible pharmaceutical or medical product injury case that you would like to discuss with an experienced Kentucky product liability attorney, call the law firm of English, Lucas, Priest & Owsley and ask for a free initial consultation. You can reach us at (270) 781-6500 or through the contact page on this website. We also handle nursing home negligence and abuse cases throughout Kentucky, including in Bowling Green, Franklin, and Glasgow.

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