Whistleblower suit against Omnicare settled

Posted on: September 6th, 2012 by Steve Larson
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Court documents filed this week show the giant pharmaceutical firm Omnicare Inc. has agreed to settle a whistleblower lawsuit involving millions of dollars in alleged kickbacks to one of Illinois’ most prominent nursing home families.  While Omnicare reached a financial settlement in principle, the terms have not been publicly disclosed. It is not clear if Omnicare’s board has approved the agreement, although a lawyer involved in the case suggested that will likely happen.

Chicago nursing home operators Philip Esformes and his father, Morris Esformes, are not part of the settlement. They continue to fight federal court allegations that Omnicare paid them a kickback by significantly inflating the purchase price it paid in 2004 for a pharmacy company they purportedly controlled.  According to the lawsuit by a whistleblowing former pharmacy company executive, Omnicare’s $32 million purchase of the pharmaceutical company linked to the Esformes family included roughly $16 million that was a kickback to secure long-term pharmacy contracts with nearly three dozen nursing homes the Esformeses operated or influenced.  Philip Esformes said through his attorney that he “has rejected offers of settlement and adamantly insists he has done nothing wrong.”

Morris Esformes said through his attorney that “the settlement does not speak to Morris Esformes’ position and Mr. Esformes continues to insist he had done nothing wrong.”

The case was brought under the False Claims Act, which allows private citizens to file lawsuits against companies and individuals defrauding the government and recover funds on the government’s behalf.