Joel gemunder sues omnicare jobs

You've probably never heard of Omnicare (OCR), so you're probably not interested in knowing that the company just paid $21 million to Michigan and Massachussetts to settle allegations that it overcharged Medicaid. But you should be: Omnicare is a massive provider of pharmacy services to old people's homes and senior care facilities, and this settlement is merely the tip of the iceberg.

If there were any justice, Omnicare CEO Joel Gemunder would be squirming under the bright lights of 60 Minutes' cameras, trying to explain the company's various drug price schemes. On his watch, Omnicare has paid out $168.5 million in legal settlements for various kickback schemes it was involved with. Among them:

  • A settlement with the federal government for $98 million. On that case, Omnicare was accused of paying $50 million to acquire a business worth no more than $5 million because the $50 million was essentially a kickback to steer pharmacy contracts to Omnicare.
  • Omnicare paid $49.5 million to settle charges it switched patients' dosing regimens in order to boost prices and rip off government reimbursers.
  • Walgreens (WAG) did the same thing, and settled those allegations for $35 million.
  • In the process of executing these schemes, Omnicare also allegedly took kickbacks from Abbott Labs (ABT), Johnson & Johnson (JNJ), AstraZeneca (AZN), Barr Pharmaceuticals (now Teva), Bayer (BAY), Eli Lilly (LLY), GlaxoSmithKline (GSK), Roche (RHHBY), Merck (MRK), Novartis (NVS), Novo Nordisk and Pfizer (PFE) to place their drugs in favorable positions on Omnicare's prescribing lists, according to this lawsuit.
  • Johnson & Johnson allegedly added $180 million to its drug sales this way, and the scheme became part of its business model (although some J&J execs expressed ethical doubts about what they were doing).
  • One patient under Omnicare's care -- remember, these are very old, sick and vulnerable patients living in care -- was cycled through 67 different drugs to help boost sales.
Given all that, you'd think Gemunder would be facing prosecution, maybe even jail time. Wrong! He just quit his job and left the company with a record $130 million -- one-hundred-and-thirty million! -- retirement payout. I guess the "lesson" here is that if your lawyers can dribble out settlements one by one, in different jurisdictions, then you can fly under the radar and still get rich.

Related:

Image by Flickr user quaziefoto, CC.