Abbott Laboratories to Pay $5.475 Million to Settle Allegations

The Department of Justice (DOJ) announced that Abbott Laboratories (Abbott) agreed to pay $5.475 million to settle allegations that Abbott paid physicians kickbacks in exchange for influencing decisions to implant Abbott devices in patients in violation of the False Claims Act (FCA). Although Abbott made no admissions of liability, the DOJ’s press release explained the settlement is in resolution of allegations that Abbott knowingly arranged payments to physicians for teaching assignments, speaking arrangements, and conferences expecting that those physicians’ action would result in the implantation of the Abbott carotid, biliary, and peripheral vascular products in patients at the hospitals with which the physicians were associated.

Abbott Products

Abbott, a global pharmaceutical and health care product company based in Abbott Park, Illinois, employs approximately 70,000 individuals and operates in over 150 countries. Among the Abbott health care products are carotid and peripheral vascular products, which treat circulatory diseases by, upon implantation, aiding with the flow of blood to the head and other parts of the body. Abbott also produces biliary devices which treat obstructions in the bile ducts.

Underlying Suit

The recent settlement announced by the DOJ resulted from a qui tam suit filed by two former Abbott employees, Steven Peters and Douglas Gray. Acting as whistleblowers and alleging violation of the FCA on behalf of the government, Peters and Gray claimed that Abbott’s payments made in exchange for physicians’ influencing hospitals to implant Abbott products in patients amounted to kickbacks in violation of FCA and in the submission of false claims to Medicare for procedures in which the Abbott products were used. Peters and Gray will share in the recovery of the government under the settlement, collecting a total of $1 million in damages for themselves.

Government Response

The DOJ claims that this settlement is representative of its recent joint efforts with HHS to combat Medicare and Medicaid fraud. Since 2009, the DOJ and HHS have teamed up to form a joint commission, the Health Care Fraud Prevention and Enforcement Action Team (HEAT), which focuses on allegations under the FCA and other statutes which identify and punish those who abuse the health care system.