Nursing-home pharmacy company Omnicare has more turmoil

Omnicare, Inc., which manages pharmacies in nursing homes and other facilities in all 50 states, changed its chief executive officer Monday in the midst of a turbulent stretch.

John Figueroa resigned as CEO after only 18 months on the job and the company said in a statement that the board of directors appointed president and chief financial officer John L. Workman as interim CEO, effective immediately.

Reports from Wall Street suggest investors were surprised.

Omnicare has operations in the Philadelphia area, including excelleRx in Center City, which provides pharmacy services for patients enrolled in hospice programs.

In 2011, Omnicare sold King of Prussia-based Omnicare Clinical Research to a private equity fund, which renamed the global, full-service contract research organization Theorem Clinical Research.

Omnicare is based in Covington, Ky., just across the Ohio River from Cincinnati.

In February, Omnicare abandoned its effort to takeover PharMerica after the U.S. Federal Trade Commission objected to the acquisition.

Then in May, Omnicare agreed to pay $50 million to U.S. taxpayers through the Drug Enforcement Administration to settle allegations stemming from a Justice Department investigation that began in 2007.

Among the allegations, according to the DEA:

  • Routinely dispensing controlled substances to residents of long-term facilities without a prescription signed by a practitioner.
  • In a limited emergency situation, dispensing controlled substances without an oral prescription called in by a practitioner.
  • Dispensing controlled substances to residents of long-term facilities from prescriptions missing essential elements, such as drug name, dosage, strength, quantity, DEA registration number and practitioner’s name.
  • Not properly documenting partially filled prescriptions thus preventing DEA from conducting an audit.

“Federal law provides that doctors, not pharmacies, are the ones who must prescribe these highly controlled substances,” Steven Dettelbach, U.S. Attorney for the Northern District of Ohio, said in a statement released by the DEA. “These laws and regulations are designed to balance the need to provide for patients while preventing misuse. This case demonstrates the need to follow those rules closely throughout the industry.”

In May, before his resignation, Figueroa said in a statement, "Omnicare is committed to compliance with the laws and regulations enforced by the DEA. We believe this settlement provides long-term care pharmacies, long-term care facilities and prescribers with clear direction regarding the procedures that must be followed when dispensing controlled substances."

Omnicare is a central player in the ongoing investigation by the Justice Department into how Johnson & Johnson's Janssen Pharmaceuticals unit pushed the antipsychotic drug Risperdal to nursing home patients, many of whom did not have schizophrenia or bi-polar disorder. Those are the only ailments for which Risperdal is approved by the U.S. Food and Drug Administration.

New J&J CEO Alex Gorsky led the Janssen unit during the period under investigation and the U.S. Attorney in Boston recently asked a judge to compel Gorsky to be questioned under oath in a deposition.

Settlement talks with J&J have apparently intensified in recent weeks.

Indications are that the civil and criminal fines could go beyond $2 billion, with Bloomberg reporting Monday that the two sides were close to settling on $2.2 billion.

The Drug Enforcement Administration press release on the settlement with Omnicare is here.

The Omnicare news release on the DEA agreement is here.