The Chicago Tribune reported that the multi-billion dollar drug company Omnicare Inc. has agreed to settle a whistle-blower lawsuit involving millions of dollars in alleged kickbacks to one of Illinois’ most prominent nursing home families. 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 whistle-blowing 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.
Omnicare, which supplies medicine to millions of nursing home residents in facilities across the U.S., declined to comment but paying millions to settle the case speaks volumes.
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.