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

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

CVS Health CVS Health Corporation (previously CVS Corporation and CVS Caremark 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 provi ...

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 (the ''target'') by another (the ''acquirer'' or ''bidder''). In the UK, the term refers to the acquisition of a public company whose shares are listed on a stock exchange, in contrast to ...

of its rival

PharMerica PharMerica is a Fortune 1000 company formed in January 2007 from the merger of Kindred Healthcare's pharmacy business with a subsidiary of AmerisourceBergen. The company is headquartered in Louisville, Kentucky, and operates a major customer sup ...

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% marketshare 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 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 prosecution. Its ...

" (

whistleblower A whistleblower (also written as whistle-blower or whistle blower) is a person, often an employee, who reveals information about activity within a private or public organization that is deemed illegal, immoral, illicit, unsafe or fraudulent. Whi ...

) 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 corporation founded in 1886 that develops medical devices, pharmaceuticals, and consumer packaged goods. Its common stock is a component of the Dow Jones Industrial Average and the company i ...

, 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 Adam B. Resnick (born March 10, 1972) is an American health care entrepreneur, public speaker, author, and professional whistleblower. Resnick has exposed Medicare fraud, Medicare and Medicaid fraud in the institutional pharmaceutical business. ...

sued Omnicare, a major supplier of drugs to

nursing homes A nursing home is a facility for the residential care of elderly or disabled people. Nursing homes may also be referred to as skilled nursing facility (SNF) or long-term care facilities. Often, these terms have slightly different meanings to in ...

, under the

False Claims Act The False Claims Act (FCA), also called the "Lincoln Law", is an American federal law that imposes liability on persons and companies (typically federal contractors) who defraud governmental programs. It is the federal government's primary litigat ...

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

Medicaid fraud Medicaid in the United States is a federal and state program that helps with healthcare costs for some people with limited income and resources. Medicaid also offers benefits not normally covered by Medicare, including nursing home care and pers ...

. 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, landlord, and the founder of Cammeby's International Group. He owns or controls property worth over $13 billion, according to data company Real Capital Analytics. Founded in 1967, Camm ...

) 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 United States government tasked with the enforcement of federal law and administration of justice in the United State ...

by paying $19.8 million to the federal government, while Mariner and SavaSeniorCare settled for $14 million. A second whistleblower lawsuit filed against Omnicare it by Resnick and Total Pharmacy Services V.P. Maureen Nehls related to kickbacks that were part of its 2004 acquisition of Total Pharmacy Services was settled 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. {{CVS Health 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