Abbott to Pay $5M to Settle Kickback Class Action Lawsuit

Abbott Laboratories agreed to settle a class action lawsuit alleging that the company engaged in paying kickbacks to induce doctors to implant the company’s carotid, biliary and peripheral vascular products.

Despite not admitting to any wrongdoing in settling the case, the company has set aside a $5.475 million class action settlement to resolve the litigation.

Carotid and peripheral vascular products are used to treat circulatory disorders by increasing blood flow to the head and various parts of the body, respectively. Biliary products are used to treat obstructions that occur in the bile ducts.

The class action settlement will resolve a whistleblower lawsuit filed by Steve Peters and Douglas Gray, both former sales reps who sued Abbott under the qui tam provision of the False Claims Act, which allows whistleblowers to file a lawsuit on behalf of the U.S. government for false claims and take part in any recovery. The whistleblowers will receive more than $1 million from the Abbott settlement.

The class action lawsuit alleges that Abbott encouraged doctors to use its biliary stents to treat peripheral artery disease. The class action contends that the use of the stents were not cleared for the U.S. Food and Drug Administration (FDA). Furthermore, the lawsuit accuses Abbot of violating the Anti-Kickback Act and causing the submission of false claims to Medicare for the procedures in which Abbott products were used.

“Patients have a right to treatment decisions that are based on their own medical needs, not the personal financial interests of their health care providers,” said Assistant Attorney General Stuart F. Delery of the Civil Division of the Department of Justice. “Kickbacks undermine the ability of health care providers to objectively evaluate and treat their patients, and will continue to be a primary focus of the Department’s health care enforcement efforts.”

“Offering financial inducements can distort health care decision-making,” said Special Agent in Charge Derrick L. Jackson of the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. “OIG and our law enforcement partners vigilantly protect government health programs from such alleged abuses.”

The settlement may hit a snag though as a plaintiff from an older class action lawsuit with the same allegations wants to object. The plaintiff is claiming that his 2006 lawsuit against Abbott came in earlier than that of Peters and Gray, which was filed in 2009.

The case is United States ex rel. Peters, et al. v. Abbott Laboratories Inc., Civil Action No. 3:09-CV-430 (E.D. Tenn.).