Omnicare, Inc. is an American company working in the health-care industry. It was established in April 1981 as a spinoff of healthcare businesses from Chemed and

W. R. Grace and Company Grace is an American chemical business based in Columbia, Maryland. It produces specialty chemicals and specialty materials in two divisions: Grace Catalysts Technologies, which makes polyethylene and polypropylene catalysts and related products ...

. It is currently a pharmacy specializing in nursing homes. In 2015, Omnicare was acquired by

CVS Health CVS Health Corporation is an American healthcare company that owns CVS Pharmacy, a retail pharmacy chain; CVS Caremark, a pharmacy benefits manager; and Aetna, a health insurance provider, among many other brands. The company is the worl ...

Controversy

In 2012, the Federal Trade Commission (FTC) sued Omnicare to block its

hostile takeover In business, a takeover is the purchase of one company (law), company (the ''target'') by another (the ''acquirer'' or ''bidder''). In the UK, the term refers to the acquisition of a public company whose shares are publicly listed, in contrast t ...

of its rival PharMerica under federal

anti-trust law Competition law is the field of law that promotes or seeks to maintain market competition by regulating anti-competitive conduct by companies. Competition law is implemented through public and private enforcement. It is also known as antitrust l ...

. The FTC alleged that the acquisition would boost drug costs and inflate Medicare expenditures by consolidating the industry and reducing price competition. PharMerica owned 97 long-term-care pharmacies, while Omnicare owned approximately 200. The merger would have given Omnicare a 57% market share versus two percent for its nearest, non-PharMerica rival. Because of the FTC opposition, the takeover was terminated. In November 2009, Omnicare paid to the federal government to settle five "

qui tam In common law, a writ of ''qui tam'' is a writ through which private citizen, private individuals who assist a prosecution can receive for themselves all or part of the damages or financial penalties recovered by the government as a result of the p ...

" (

whistleblower Whistleblowing (also whistle-blowing or whistle blowing) is the activity of a person, often an employee, revealing information about activity within a private or public organization that is deemed illegal, immoral, illicit, unsafe, unethical or ...

) lawsuits and government charges that the company had paid or solicited a variety of

kickbacks A kickback is a form of negotiated bribery in which a commission is paid to the bribe-taker in exchange for services rendered. Generally speaking, the remuneration (money, goods, or services handed over) is negotiated ahead of time. The kickback ...

. The company admitted no wrongdoing. The charges included allegations that Omnicare solicited and received kickbacks from a pharmaceutical manufacturer

Johnson & Johnson Johnson & Johnson (J&J) is an American multinational pharmaceutical, biotechnology, and medical technologies corporation headquartered in New Brunswick, New Jersey, and publicly traded on the New York Stock Exchange. Its common stock is a c ...

, in exchange for agreeing to recommend that physicians prescribe Risperdal, a Johnson & Johnson antipsychotic drug, to nursing home patients. Starting in 2006, healthcare entrepreneur Adam B. Resnick sued Omnicare, a major supplier of drugs to

nursing homes A nursing home is a facility for the residential care of older people, senior citizens, or disabled people. Nursing homes may also be referred to as care homes, skilled nursing facilities (SNF), or long-term care facilities. Often, these terms ...

, under the

False Claims Act False or falsehood may refer to: * False (logic), the negation of truth in classical logic * Lie or falsehood, a type of deception in the form of an untruthful statement * False statement, aka a falsehood, falsity, misstatement or untruth, is a st ...

, as well as the parties to the company's illegal kickback schemes. Omnicare allegedly paid kickbacks to nursing home operators to secure business, which constitutes Medicare and

Medicaid fraud Medicaid is a government program in the United States that provides health insurance for adults and children with limited income and resources. The program is partially funded and primarily managed by state governments, which also have wide lat ...

. Omnicare allegedly had paid $50 million to the owners (Leonard Grunstein and

Rubin Schron Rubin "Rubie" Schron is a New York City real estate investor, philanthropist, and the founder of Cammeby's International Group. In 2013, Schron made an unsuccessful offer to buy the Empire State Building for $2 billion. In 2003, an investment gr ...

) of the Mariner Health Care Inc. and SavaSeniorCare Administrative Services LLC nursing home chains in exchange for the right to continue providing pharmacy services to the nursing homes. In 2010, Omnicare settled Resnick's False Claims Act suit that had been taken up by the

U.S. Department of Justice The United States Department of Justice (DOJ), also known as the Justice Department, is a federal executive department of the U.S. government that oversees the domestic enforcement of federal laws and the administration of justice. It is equi ...

by paying $19.8 million to the federal government, while Mariner and SavaSeniorCare settled for $14 million. A second whistleblower lawsuit filed against Omnicare by Resnick and Total Pharmacy Services V.P. Maureen Nehls related to kickbacks that had been part of its 2004 acquisition of Total Pharmacy Services was settled (circa 2013) for $17.2 million by Omnicare and $5 million by the Total Pharmacy owners. Reportedly Omnicare was set to acquire JobMinglr.com for an undisclosed sum.

Notes

External links

Omnicare v. NCS Healthcare
- Major case involving anti-takeover provisions. {{Portal bar, Companies, Medicine, USA Companies formerly listed on the New York Stock Exchange Health care companies based in Ohio Pharmacy benefit management companies based in the United States Specialty drugs CVS Health Companies based in Cincinnati American companies established in 1981 Health care companies established in 1981 1981 establishments in Ohio 1980s initial public offerings 2015 mergers and acquisitions Corporate spin-offs