to determine a rebate to the government. By reporting an artificially high best pnce, the
Defendant Manufacturers were able to report and pay artificially low rebates, costing the
government millions of dollars.
At all relevant times, the Defendant Manufacturers knew providing kickbacks to
Omnicare that dramatically lowered the prices of their "preferred" medications required the
Defendant Manufacturers to report these lower best prices paid by Omnicare for their preferred
medications to the government, which would have resulted in the Defendant Manufacturers
paying greater rebates to all states' Medicaid Programs.
The artificially high best price reported by the Defendant Manufacturers through
their suppression of the kickbacks-for-switches scheme and resulting actual best price afforded to
Omnicare resulted in false claims to many other federal agencies that buy drugs. The federal
government utilizes best price reporting to set prices for PHS/340b entities and the Federal
Supply Schedule. Because the Defendant Manufacturers repolied an artificially high best price,
these entities ended up paying millions more for these medications than they would have had the
Defendant Manufacturers reported the proper best price information.
The pricing records the Defendant Manufacturers were required to submit under
federal law on a regular basis were therefore material to the determination of prices on thousands
of different transactions between Defendant Manufacturers and the government.
updated on February 6, 2006, that under the Medicare Modernization Act, rebates paid to long
term care pharmacies that participate in Medicare Part D "would affect the best price
calculation" under Section 1860D-2(d)(l )(C).