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Federal government paid millions of dollars it did not have to pay. The kickbacks-for-switches

scheme rendered the Defendant Manufacturers' quarterly pricing submissions under the 340b

program and their annual pricing submissions under the FSS program false claims, and caused

millions of dollars' worth of other false claims to be paid based on the fraudulent best price

reports.

17.

Furthermore,

Defendant

Manufacturers'

participation

111

the

kickbacks-for-

switches scheme with Omnicare, including their resulting failure to report actual best price,

violated their contractual agreements certifying compliance with all applicable regulations as a

precondition for receiving payment for pharmaceuticals under the Medicaid, FSS and 340b

programs.

Additionally

Defendant

Manufacturers

failed

to

notify,

as

requied,

the

National

Acquisition Center's Contracting Officer of these "price reductions." Defendant Manufacturers

are therefore noncompliant with these programs and subject to exclusion from each of these

govermnent programs and other penalties.

18.

On October 27, 2003, Lisitza filed a related qui tam complaint in the United

States District Court for the Northern District of Illinois, entitled U.S. ex reI. Lisitza et al. v. TAP

Phannaceuticals Products, Inc. and Omnicare, Inc., No. 03 C 7578 (N.D. Ill. 2003), against

Omnicare and another manufacturer. In that complaint, Lisitza detailed Omnicare's role in the

kickbacks-for-switches conspiracy, as well of the conduct of another Defendant Manufacturer,

TAP Pharmaceutical Products, Inc.

19.

Defendant Manufacturers' unlawful activities also caused Omnicare to submit

millions of dollars in false claims to private companies providing health insurance to Illinois

residents, in violation of the Illinois Insurance Claims Fraud Prevention Act.

5

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