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

Background

This omnibus order resolved the remaining post-trial motions filed by Omnicare, Inc. and CVS Health Corporation. The Government had alleged under the False Claims Act that Omnicare caused government health-insurance programs to pay claims for prescription drugs that were dispensed without valid prescriptions. The jury found against Omnicare and CVS Health Corporation. The order states that the jury found 3,341,032 false claims, compared with the 11,516,060 claims alleged by the Government.

Omnicare’s motion for judgment as a matter of law

A judgment as a matter of law may be entered after a jury trial only when a reasonable jury would lack a legally sufficient evidentiary basis for its decision. Omnicare argued that the evidence did not establish falsity, materiality, knowing conduct, or damages under the False Claims Act.

The court denied Omnicare’s motion. On falsity, the court identified evidence that Omnicare pharmacies dispensed drugs without valid prescriptions, including employee testimony, internal communications, agency findings, third-party audits, and expert testimony. The court also relied on evidence that Omnicare’s computer systems generated false prescriber names, prescription numbers, and prescription dates, making the claims appear to be supported by valid prescriptions. The court held that federal law required prescription drugs to be dispensed pursuant to a valid prescription and that the Government presented enough evidence for the jury to find both legally false and factually false claims.

On materiality—the requirement that the false information matter to the Government’s payment decision—the court cited evidence that Medicare, Medicaid, and TRICARE would not pay for drugs dispensed without valid prescriptions. The court rejected Omnicare’s arguments that the Government had approved its practices, that the violations were merely technical, and that patients’ receipt of the drugs meant the Government received the benefit of its bargain.

On knowing conduct, the court found sufficient evidence that Omnicare employees, including compliance personnel, understood that the dispensing practices created a significant compliance problem. The court also rejected Omnicare’s argument that government audits showed approval of the practices. Regarding damages, the court held that Omnicare’s arguments largely repeated its unsuccessful challenges to falsity and the damages instructions.

Omnicare’s motion for a new trial

The court also denied Omnicare’s motion for a new trial. Omnicare challenged the jury instructions concerning industry practice, government knowledge, factual falsity, and damages. The court concluded that the instructions correctly stated the law, adequately covered the issues, or, if any error existed, was harmless.

The court also rejected Omnicare’s challenges to five evidentiary rulings. It held that two witnesses properly testified as fact witnesses based on their work and personal familiarity with relevant government data; that evidence concerning changes to Omnicare’s computer coding was relevant to knowing conduct; and that testimony about the general risk of harm from medications without proper monitoring was admissible background evidence. The court further held that Omnicare could not rely on speculation about prescription records that it had not produced and that it had waited too long to challenge earlier discovery rulings concerning an audit that was proposed but never conducted.

The court allowed Dr. W. Thomas Smith, a pharmacology expert, to testify about pharmacy dispensing standards in various states. It concluded that his testimony assisted the jury and did not replace the court’s instructions on the False Claims Act. The court also held that the verdict was not seriously contrary to the evidence.

CVS Health Corporation’s motion

CVS Health Corporation sought judgment as a matter of law or, alternatively, a new trial. The court denied the motion for judgment as a matter of law as procedurally improper because the court had already denied CVS’s earlier motion for judgment as a matter of law after the verdict. The court therefore would not consider new arguments that CVS sought to raise after trial and referred to its earlier merits ruling.

The court also denied CVS’s alternative motion for a new trial. CVS argued that the evidence did not show that it participated in submitting claims or setting Omnicare’s policies. The court stated that those issues had already been resolved against CVS and that its current filings did not change that conclusion. The court rejected CVS’s related evidentiary challenges for the same reasons it rejected Omnicare’s challenges.

Disposition and judgment

The court denied all three motions: Omnicare’s motion for judgment as a matter of law, Omnicare’s motion for a new trial, and CVS Health Corporation’s motion for judgment as a matter of law or, alternatively, for a new trial.

The Clerk was directed to enter judgment for the Government against Omnicare in the amount of $948,778,444.10. That amount consists of $406,778,444.10 in damages, described as $135,592,814.70 trebled, plus $542,000,000 in statutory penalties. Of the penalties, $164,800,000 is joint and several with CVS Health Corporation. The Clerk was also directed to enter judgment against CVS Health Corporation for $0 in damages and $164,800,000 in statutory penalties, with that liability joint and several with Omnicare. The case was to be closed when judgment was entered.