Corporate Compliance

PharMerica settles OIG claim for record $5.975 million

Compliance Monitor, March 30, 2005

The OIG on March 29 announced that it reached a $5.975 million settlement--its largest ever in a civil monetary kickback case--with institutional pharmacy company PharMerica, Inc.

The settlement resolves a lawsuit filed June 17, 2004, that charged that PharMerica paid an excessive amount to buy Roanoke, VA, pharmacy Hollins Manor 1 in exchange for a commitment from the seller to refer its Medicaid and Medicare pharmacy business for the next seven years. According to an OIG release, the seller also owned 17 nursing homes and eight assisted living facilities that had approximately 2,800 residents. PharMerica paid $7.2 million for the pharmacy, even though it had "virtually no operating history."

"This settlement demonstrates the OIG's continued commitment to the use of all tools at our disposal to eliminate practices undermining the integrity of federal healthcare programs," said Daniel R. Levinson, acting inspector general.

Under the terms of the settlement, PharMerica must also enter into a comprehensive five-year corporate integrity agreement.

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