Abbott Labs Pays to Settle Kickback Allegations

According to the U.S. Department of Justice (DOJ), Abbott Laboratories Inc. has agreed to pay $5.475 million to settle medical device kickback allegations.

DOJ officials claim that Abbott paid physicians for speaking engagements among other things under the expectation that the doctors would then arrange for their affiliate hospitals to buy Abbott’s carotid, biliary and peripheral vascular products. 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.

This settlement was the result of an investigation by the Justice Department’s Civil Division, the U.S. Attorney’s Offices for the Eastern District of Tennessee and the Northern District of California and the Office of Inspector General at the U.S. Department of Health and Human Services.

“Patients have a right to treatment decisions that are based on their own medical needs, not the personal financial interests of their healthcare providers,” said assistant Attorney General Stuart F. Delery of the DOJ’s civil division. “Kickbacks undermine the ability of healthcare providers to objectively evaluate and treat their patients, and will continue to be a primary focus of the department’s healthcare enforcement efforts.”

An Abbott spokeswoman said the company is pleased to have the matter behind it, although the company believes that its actions were appropriate. Abbott settled the matter to avoid the expense of a protracted legal proceeding, she added.

“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.

The Justice Department said the settlement resolves allegations that stemmed from a lawsuit from former Abbott employees Steven Peters and Douglas Gray, who will receive a total payment of more than $1 million as part of the resolution.

Abbott Laboratories is based in Abbott Park, Ill.