Omnicare, Teva unit pay $112 million for kickbacks

WASHINGTON (Reuters) - Omnicare Inc, the largest U.S. provider of pharmacy services to nursing homes, will pay $98 million and Teva subsidiary IVAX Pharmaceuticals will pay $14 million to settle allegations of kickbacks, the U.S. Department of Justice said on Tuesday.

The department said Omnicare both solicited and paid kickbacks.

Omnicare allegedly asked IVAX to pay $8 million in exchange for agreeing to purchase $50 million in IVAX drugs, the DOJ said.

It also accused Omnicare of soliciting kickbacks from Johnson & Johnson <JNJ.N> in exchange for recommending that physicians prescribe the antipsychotic drug Risperdal to nursing home patients.

"J&J's kickbacks to Omnicare took multiple forms, including rebates that were conditioned on Omnicare engaging in an 'Active Intervention Program' for Risperdal and payments disguised as data purchase fees, educational grants, and fees to attend Omnicare meetings," the Justice Department said.

Omnicare said it settled the allegations without admitting any wrongdoing.

"The settlement agreement does not include any finding of wrongdoing or any admission of liability by Omnicare," the company said in a statement. "The company denies the contentions of the federal government and the qui tam relators (whistle-blowers) as set forth in the complaints and further denies any liability related to those contentions."

Teva said in an email statement that "IVAX denies any liability relating to the contract at issue," adding that it was executed "years before IVAX was acquired by Teva."

Teva said it settled "to avoid the uncertainty and expense of litigation."

(Reporting by Diane Bartz; Editing by Maureen Bavdek, Gary Hill)