Attorney General Conway announced on Wednesday, October 7, 2015, that Kentucky joined with other states and the federal government in reaching an agreement with PharMerica Corporation, which provides prescription medication to long-term care facilities, to settle civil allegations that PharMerica conspired with Abbott Laboratories through a number of disguised kickback arrangements to increase overall utilization of the drug Depakote and to promote the usage of Depakote for purposes beyond which it had been approved by the U.S. Food and Drug Administration. Depakote is used to treat seizures and manic depression episodes.
The states contend that from January 1, 2001 through December 31, 2008, PharMerica knowingly solicited and received illegal kickbacks from drug manufacturer Abbott in the form of rebate agreements that required PharMerica to engage in certain promotional programs, grants and other financial support. This alleged conduct resulted in over-prescribing Depakote that amounted to false claims to Medicaid and other federal healthcare programs.
“Reckless promotion of drugs resulting in false claims to state and national healthcare programs is unacceptable,” said Attorney General Jack Conway. “Drug companies that exploit Kentucky taxpayers’ through improper and deceptive marketing practices will face the consequences.”
PharMerica will pay the states and the federal government a total of $9.25 million in civil damages to compensate Medicaid, Medicare, and various federally-funded healthcare programs for harm suffered as a result of its conduct. This settlement is based on two qui tam cases that were consolidated and are pending in the United States District Court for the Western District of Virginia in Abingdon, Va. The cases were filed under federal and state false claims statutes. As part of the settlement, the Commonwealth of Kentucky will receive $27,838.49.
Abbott entered into an $800 million civil settlement concerning the same conduct in 2012. The Kentucky Medicaid program received $3,045,094.57 as its portion of that settlement.
A state team appointed by the National Association of Medicaid Fraud Control Units participated in the investigation and conducted the settlement negotiations with PharMerica on behalf of the participating states. Team members include representatives from the Offices of the Attorneys General for the states of California, Illinois, Maryland, Massachusetts, New York, Ohio, South Carolina and Virginia.
Since Attorney General Conway took office in January 2008, his Office of Medicaid Fraud and Abuse Control has led or participated in actions which have been awarded more than $300 million for the state and federal Medicaid and other health care programs. These cases range from lawsuits and settlements against pharmaceutical companies to cases against individual providers.
In 2012, General Conway’s Medicaid Fraud Unit was named one of the most aggressive in the country by the nonprofit watchdog group Public Citizen. The Attorney General’s tip line for reporting allegations of abuse is 1-877-228-7384.