United States of America ex rel. Uri Bassan v. Omnicare, Inc.

Background

Relator Uri Bassan originally brought this qui tam False Claims Act case in June 2015 on behalf of the federal government, 29 states, and the District of Columbia. In 2019, the United States intervened and filed a complaint against Omnicare, Inc. and CVS Health Corp. The Government and Bassan allege that, from 2010 through 2018, Omnicare dispensed prescription drugs to residents of long-term-care facilities using prescriptions that had expired, lacked refills, or were otherwise invalid. They further allege that Omnicare sought reimbursement from federal healthcare programs for those dispensings by submitting claims containing false information.

The opinion addresses eleven motions under Federal Rule of Evidence 702 and the standards associated with Daubert v. Merrell Dow Pharmaceuticals. These motions asked the court to exclude proposed expert testimony before trial. The opinion also addresses a motion concerning a late-provided declaration, motions to seal or maintain seals, and trial scheduling. It does not decide whether the alleged False Claims Act violations occurred.

Expert testimony

The court denied the following defense motions to exclude testimony:

- The motion concerning W. Thomas Smith. The court found that Smith’s pharmacy experience qualified him to explain pharmacy requirements and evaluate whether Omnicare’s dispensings complied with pharmacy standards. The court noted that the Government identified 45,544 dispensings as invalidly prescribed, including 31,392 allegedly made without any prescription or medical authorization. - The motion concerning Mary Beth Landrum. The court held that her statistical sampling and extrapolation were sufficiently reliable for this case. It reasoned that Omnicare’s computerized dispensing program operated without varying by state, patient, facility, or pharmacy within the sample population, and that the alleged conduct did not depend on individualized clinical judgments. - The motion concerning David Nace’s risk-of-harm testimony. The court concluded that his opinion was supported by evidence and was not impermissibly speculative. The court noted that the Government was not offering evidence that a patient was actually harmed, and questioned whether the Government needed to prove risk of harm. Nevertheless, the court denied the motion because the testimony could become relevant in rebuttal if a defense expert testified about risk of harm or a related issue. - The motion concerning Alfred Lee Meyer. The court found that Meyer’s experience managing pharmacy services in multiple states and serving as president of the American Society of Consultant Pharmacists supported his qualifications to address pharmacy practices. - The motion concerning Chad Hardy. The court found Hardy qualified to testify about pharmacy computer systems, programming controls, access settings, training, and reference materials. The court stated that Hardy could testify about measures Omnicare should have implemented, but would not testify that particular prescriptions actually rolled over or that particular dispensings occurred without current and valid prescriptions.

The court also denied the Government’s motions to exclude testimony from Vipul Kella, Sherry Pound, Bo Martin, Trenton Thiede, and Barry Hart. The court found that Kella’s medical and administrative experience supported his opinions about residential-care practices, medication adherence, and chart orders. It found that Pound could provide industry context and discuss comparisons involving prescription-drug-event validation audits, although she could not testify about the intent of the Centers for Medicare & Medicaid Services. The court found that Martin and Thiede could provide rebuttal testimony criticizing the methods and conclusions of the Government’s experts, so long as they did not offer legal opinions or discuss what the lawsuit legally covered. The court found Hart qualified to rebut testimony about pharmacy computer functions, practices, training, and industry standards.

The Government’s motion concerning Reginald Dilliard was granted in part and denied in part. The court allowed Dilliard to testify that state pharmacy regulation is decentralized and not uniform, that pharmacy laws may contain gaps requiring professional judgment, and that accepted industry standards may be relevant when state law is silent. The court also allowed him to criticize Smith’s reading of state law. But Dilliard could not testify that pharmacists may replace state-law requirements with changing industry practices when the law is outdated or more restrictive. The court emphasized that pharmacists may not ignore state law in favor of what they consider best practices.

Motion concerning Margo Kunze

The court denied Defendants’ motion to strike Margo Kunze’s late-provided declaration. The declaration corrected testimony from her October 17, 2023 deposition, and the court deemed the deposition testimony amended to include the correction. The court denied Defendants’ request to reopen discovery and stated that any necessary questions could be addressed to Kunze at trial.

Motions to seal

The court denied the Government’s and Defendants’ motions to seal or maintain a seal, subject to the procedures described in the order. Documents connected to testimony that the court permitted would remain sealed temporarily while the parties identified them. The court directed the parties to submit redacted documents protecting confidential patient information, including names, Social Security numbers, and addresses. Documents relating solely to excluded testimony could remain sealed only if a party submitted a separate explanation showing why continued sealing was justified. The court stated that Omnicare’s computer program and prescribing practices could not remain sealed as trade secrets because the case would be tried publicly and those subjects would need to be explained to the jury.

Trial schedule and disposition

The court set the case for trial on March 17, 2025, or as soon as the criminal trial in United States v. Mehdiyev et al. concluded. It set deadlines for motions addressing other trial evidence and for the final pretrial conference. The court also stated that the parties would need to try the case or settle it and that it would not move the trial date to accommodate scheduling conflicts or settlement discussions.

The order disposed of the outstanding expert-evidence motions, the motion concerning Kunze’s declaration, and the sealing motions. The case itself was not resolved on the merits. The order’s classification is therefore procedural: it addressed evidence, access to court documents, discovery, and trial preparation rather than deciding whether Omnicare violated the False Claims Act.