Opinion ID: 1267160
Heading Depth: 3
Heading Rank: 5

Heading: False Assurances of Legal Compliance

Text: Finally, Plaintiffs accuse Omnicare of falsely claiming that the company complied with the law when it was involved in two illegal practices: improper drug recycling and improper drug substitution. As to the former allegations, Plaintiffs say that Omnicare was repackaging and reshipping drugs with varying expiration dates, including some expired drugs. The latter allegation relates to a scheme to replace cheaper doses of certain medicines with more expensive doses ( e.g., capsules for tablets) in order to increase revenue. [4] In light of these practices, Plaintiffs allege that Omnicare made materially misleading statements on a number of occasions when it assured the public that it was complying with the law. For example, a November 7, 2005, a press release explained that Omnicare's policy is to comply with all applicable federal and state laws and regulations. To the best of our knowledge, our purchases of pharmaceuticals comply with all applicable laws and regulations and are consistent with Omnicare's goal of providing appropriate pharmaceutical care cost-effectively for the seniors we serve. Similar statements were allegedly made in January and February 2006. In January 2006, several government raids were conducted on Omnicare facilities. By late 2006, two settlements had resulted. The first involved one of Omnicare's Michigan subsidiaries, Specialized Pharmacy, whose president was charged with fraud. This case was settled for $52.5 million. The second settlement was with the attorney generals of 43 states and involved Omnicare's alleged substitution of dosage forms on several generic drugs (e.g., tablets with capsules). This settlement obligated Omnicare to pay $49.5 million.