United States ex rel. Silver v. Omnicare, Inc., PharMerica Corp, et al.

On July 3, 2024 finalized the resolution of this case, resulting in a $100 million settlement agreement between Relator Marc Silver and defendant PharMerica Corporation. Berger Montague achieved this tremendous settlement, which will return more than $70 million to the federal and state governments and a substantial reward for the Relator.

While several defendants settled, Berger Montague continued to litigate against Pharmerica, the second largest supplier of drugs to nursing homes in the US. The case was filed 13 years ago by Berger Montague in the District Court of New Jersey. The government declined the case after investigating, but Relator Marc Silver and his counsel at Berger Montague were determined to fight on for justice, which is their right under the Federal False Claims Act. A full decade of intense litigation ensued, including reversing an early dismissal of the case through a successful appeal to the Third Circuit Court of Appeals and the denial of certiorari by the Supreme Court. PharMerica challenged the case at every turn, filing numerous potentially dispositive or crippling motions, all of which were eventually defeated. Finally, on the eve of trial, settlement was reached. Berger Montague achieved this tremendous settlement, which will return more than $70 million to the federal and state governments and a substantial reward for the Relator.

Relator claimed that PharMerica, which owns a chain of a long-term care institutional pharmacies across the country, had improperly received hundreds of millions of dollars from government payors through violations of the Anti-Kickback Statute and False Claims Act from 2005 through 2014. Relator specifically alleged that PharMerica won or renewed pharmacy services contracts with certain Skilled Nursing Facilities (“SNFs”) by offering them below cost drug pricing for their Medicare Part A patients, for which the SNFs were financially responsible, in order to obtain the right to service the SNFs’ much larger and profitable Medicare Part D and Medicaid patients, who were insured by government health care programs. While PharMerica experienced losses from the SNFs’ Medicare A business, it made profits on the SNFs’ Part D and Medicaid business, and on the contracts overall.

This practice, which is known as “swapping” and is similar to “loss leader” pricing seen in many other industries, is strictly prohibited in the healthcare setting where such pricing can influence healthcare decisions and outcomes by distorting markets, changing utilization patterns, and decreasing the quality of services that the federal and state governments pay for through programs like Medicare and Medicaid.

Relator Marc Silver is a Certified Public Accountant and former owner of a SNF, Silver Care Center of Cherry Hill, New Jersey, and a pharmacy.

Berger Montague is one of the nation’s preeminent law firms focusing on complex civil litigation, class actions, and mass torts in federal and state courts throughout the United States. The firm is active in the fields of antitrust, commercial litigation, consumer protection, defective products, environmental law, employment law, securities, and whistleblower cases, among many other practice areas. For more than 50 years, Berger Montague has played lead roles in precedent-setting cases and has recovered over $60 billion for its clients and the classes they have represented. Berger Montague is headquartered in Philadelphia and has offices in Chicago, Minneapolis, San Diego, San Francisco, Toronto, Washington, D.C., and Wilmington, DE.