Omnicare, a Kentucky-based prescription drug and medical services supplier for nursing homes, this week agreed to pay $49.5 million to the federal government and 43 states to settle Medicaid prescription drug fraud allegations, CQ HealthBeat reports (CQ HealthBeat, 11/15). The allegations resulted from whistleblower lawsuits filed in U.S. District Court in Chicago by two former Omnicare employees and the Department of Justice (AP/Long Island Newsday, 11/16). According to DOJ, Omnicare "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 medications involved are ranitidine, a generic version of the acid reflux disease treatment Zantac; fluoxetine, a generic version of the antidepressant Prozac; and buspirone, a generic version of antianxiety treatment Buspar (CQ HealthBeat, 11/15). The lawsuits alleged that Omnicare provided Medicaid beneficiaries with ranitidine capsules, rather than less expensive tablets, fluoxetine tablets rather than less expensive capsules, and two 7.5-milligram buspirone tablets, rather than one less expensive 15-milligram tablet. As result of the practice, Omnicare overcharged Medicaid by millions of dollars, according to the lawsuits (AP/Long Island Newsday, 11/16).

Settlement Details, Comments
The settlement of the Medicaid prescription drug fraud allegations does not include an admission of wrongdoing or liability, Omnicare officials said. As part of the settlement, Omnicare officials signed a "Corporate Integrity Agreement" that requires new accountability standards within the company and additional training for company employees. Omnicare officials said, "The company agreed to settle the matter in order to avoid expensive and time consuming litigation and to focus on its mission of providing high-quality pharmaceutical care for the elderly" (Hladky, New Haven Register, 11/15). Patrick Fitzgerald, U.S. attorney for the Northern District of Illinois, said, "The health care industry should be wary of manipulating federal and state programs in this manner because, under the federal False Claims Act and its state counterparts, those who are caught face the prospect of triple damages plus significant additional penalties and attorneys fees" (CQ HealthBeat, 11/15).