On Friday, the U.S. Department of Justice announced that global pharmaceuticals and healthcare products company Abbott Laboratories has agreed to pay the United States $5.475 million to resolve allegations that the company violated the False Claims Act by paying improper kickbacks to induce doctors to use some of its products.
According to a DOJ press release, the settlement resolves the allegations that Abbott, based in Abbott Park, Ill., paid well-known physicians for teaching assignments, speaking engagements and conferences expecting, in return, that those physicians would arrange for the hospitals to which they are affiliated to purchase Abbott’s carotid, biliary and peripheral vascular products.
[See also: Fraud recoveries on the rise]
“Physicians should make decisions regarding medical devices based on what is in the best interest of patients without being induced by payments from manufacturers competing for their business,” said U.S. Attorney Bill Killian of the Eastern District of Tennessee, in the DOJ’s press release.
The physician kickback allegations were originally brought in a lawsuit filed by Steven Peters and Douglas Gray, former Abbott employees, under the qui tam provision of the False Claims Act. As part of the settlement with the government, Peters and Gray will receive a total payment of more than $1 million.
This settlement follows a $1.5 billion settlement resolved in 2012 but on the federal government’s books for 2013. In 2012, Abbott Laboratories agreed to pay $1.5 billion to resolve allegations that it engaged in off-label marketing when it illegally promoted the drug Depakote to treat agitation and aggression in elderly dementia patients and schizophrenia when neither of these uses was approved as safe and effective by the FDA.
The $1.5 billion settlement is considered by the DOJ to be one of the largest fraud recoveries of 2013.
[See also: $2.6B in qui tam healthcare cases recovered by the DOJ in 2013]