One of the nation’s most profitable pharmaceutical companies will pay $120 million to settle allegations that it submitted false claims for payment to the government. Omnicare, according to the allegations in the Complaint, was engaging in a practice providing extremely discounted prescription drugs to facilities for Medicare Part A inpatients.
The lawsuit was filed under the False Claims Act, which allows for individuals with knowledge of entities filing false claims for payment to file suit on the behalf of the government and share in the recovery.
Donald Gale was a pharmacist who worked for Omnicare from 1993 through 2010. Gale was responsible for bringing suit against the company. His Complaint alleged that the prices facilities were being offered was well below the actual market value of the goods being offered. The company would then charge Medicare for the full price of the drug. If the allegations are true, the practice would be a violation of the Medicare Anti-kickback provisions and the False Claims Act.
“There are untold numbers of schemes like the one exposed by Mr. Gale at work in the country, even today,” commented Christopher Paulos, an attorney with the Levin, Papantonio law firm who practices in the areas of qui tam or whistleblower law and False Claims Act litigation but did not represent Donald Gale in this case.
At this time, the potential settlement is before the Department of Justice for approval. If the settlement is accepted, Gale stands to receive 25 to 30 percent of the total settlement for his efforts as a whistleblower.
“Individuals that come forward to report activities like those reported by Mr. Gale often do so at their own peril,” Mr. Paulos continued. “However, the False Claims Act empowers such individuals to stand toe-to-toe with corporations and fight their corruption.”