A federal jury has delivered a stinging blow to long-term care pharmacy giant Omnicare, finding the CVS Health subsidiary liable for a staggering $136 million in damages for fraudulently dispensing drugs without valid prescriptions. This amount is expected to balloon to over $406 million after statutory penalties are applied, marking it as “one of the largest damages verdicts rendered by a jury in a False Claims Act case,” according to the Department of Justice.
The unanimous verdict, reached in a case involving more than 3,000 senior living communities, alleges that Omnicare billed Medicare, Medicaid, and TRICARE for over three million false claims. These claims stemmed from a practice of improperly filling prescriptions for residents in assisted living communities and other non-skilled nursing facilities for longer than legally allowed.
“This lawsuit centered on a highly technical prescription dispensing record keeping issue that was allowed by law in many states,” stated Amy Thibault, CVS Health executive director, corporate communications – external affairs, in response to the verdict. She added that the practices in question were specific to Omnicare, ceased in 2018, were common in the industry at the time, and were accepted by the Centers for Medicare & Medicaid Services (CMS). The company plans to appeal the decision.
However, the government argued successfully that Omnicare’s practice of assigning new numbers to old prescriptions and continuing to dispense drugs for months or even years after they had expired put residents at “significant risk of harm.” Unlike skilled nursing facilities with 24-hour medical care, assisted living and similar communities often have limited or no on-site physician oversight. The expiration of a prescription is a critical point that typically triggers a necessary physician review of a resident’s medication needs.
The lawsuit highlighted that Omnicare’s own policy prohibited dispensing prescription drugs to individuals in residential facilities more than one year after the prescription was written. The government further contended that Omnicare provided inadequate training to its employees on the differing dispensing requirements between skilled and non-skilled nursing facilities.
This verdict comes at a time when CVS has been exploring the sale of its long-term care pharmacy business, Omnicare. While a sale was initially anticipated, CVS stated in late 2023 that it was no longer expected “in the near term.” The $10.4 billion acquisition of Omnicare in 2015, coupled with the assumption of $2.3 billion in debt, now faces significant financial repercussions.
This case underscores the critical importance of accurate and compliant medication management in long-term care settings. As the senior living industry continues to grow, ensuring the well-being and safety of residents through proper dispensing practices remains paramount. According to the National Institute on Aging, in 2020, over 800,000 people resided in assisted living and residential care communities across the United States. This significant population relies on the integrity of medication dispensing processes to maintain their health and quality of life. The outcome of Omnicare’s appeal will be closely watched by the industry, as it could have significant implications for pharmacy practices and regulatory oversight in long-term care.