Justice Department sues CVS subsidiary Omnicare

A CVS Health subsidiary, Omnicare, is facing a lawsuit from the Department of Justice over allegations the company defrauded government health programs by providing prescription drugs to thousands of long-term care facilities without proper prescriptions.

Omnicare is one of the nation’s largest pharmacy service providers to long-term care facilities. The DO joins whistleblowers in the lawsuit that Omnicare violated the False Claims Act in a pattern of behavior from 2010 to 2018 and is seeking damages and civil penalties.

The DOJ alleges the company defrauded Medicare, Medicaid and TRICARE by billing for hundreds of thousands of non-controlled drugs that were dispensed without proper prescriptions to elderly and disabled residents in assisted living facilities, group homes for special needs individuals, independent living communities and other long-term care facilities. Omnicare dispensed the drugs “indefinitely” based on prescriptions that were expired, out of authorized refills or invalid for other reasons, according to the suit.

“Rather than performing its basic professional obligation as a pharmacy to obtain a new prescription after an old one expired or ran out of refills, Omnicare simply assigned a new number to the old prescription and kept on dispensing, as if a new prescription had been obtained,” the lawsuit reads, noting Omnicare let the prescriptions roll over in at least 1,766 residential facilities.

“Omnicare 'rolled over' prescriptions so that it could push its product out the door as fast as possible.”

The drugs involved include those to treat serious conditions such as heart disease, dementia and diabetes. Antipsychotic drugs, anticonvulsant medications, cardiovascular drugs and other drugs that have serious side effects and should be monitored by a doctor were mentioned in the lawsuit as the types of drugs dispense illegally by Omnicare.

According to the lawsuit, Omnicare and its parent company, CVS Health, failed to reliably track expiration dates of prescriptions and obtain new prescriptions when necessary. In addition, the DOJ alleges senior management at Omnicare and CVS Health knew about the bad practices but continued them anyway until an investigation was raised.

CVS Health disputes the allegations.

“We do not believe there is merit to these claims, and we intend to vigorously defend the matter in court,” a corporate spokesperson from CVS Health told Health Exec. “We are confident that Omnicare’s dispensing practices will be found to be consistent with state requirements and industry-accepted practices.”