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Healthcare Business News

Abbott agrees to cooperate in kickback investigation

By Joe Carlson
Posted: December 30, 2013 - 3:00 pm ET

Abbott Laboratories has agreed to cooperate in an investigation of alleged kickbacks to doctors in return for them encouraging hospitals to buy the company's array of vascular products.

Abbott and the U.S. Justice Department announced last week the company would pay $5.5 million to settle a lawsuit claiming (PDF) it knowingly bribed the doctors to influence purchasing decisions between 2005 and 2010. The allegations came from two formerly high-ranking Abbott sales personnel, Steve Peters and Douglas Gray.

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Abbott, based in Abbott Park, Ill., did not admit wrong-doing in the whistleblower lawsuit (PDF), which alleged the company knowingly made payments to doctors that broke the anti-kickback law, triggering False Claims Act violations of Medicare payment rules.

“We're pleased to resolve this matter. Abbott entered into the settlement agreement to avoid the uncertainty and expense of protracted litigation. Abbott believes its actions were appropriate at all times,” the company said in a statement.

The two whistleblowers said Abbott paid “prominent” doctors to take teaching assignments and speaking engagements with the expectation that they would then arrange for the hospitals with which they were affiliated to purchase Abbott's carotid, biliary and peripheral vascular products, according to the U.S. attorney's office in Knoxville, Tenn., where the case was filed.

“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,” U.S. Attorney Bill Killian of the Eastern District of Tennessee said in a news release.

Peters and Gray will receive a total of just over $1 million from the settlement under the False Claims Act, which allows private parties to collect awards in cases when they bring insider information that leads to settlements involving allegedly false claims to government programs.

As part of the settlement, the company agreed to cooperate in an investigation of any individuals or entities allegedly involved in the scheme who have not yet settled. That includes encouraging its current and former directors, officers and employees to testify for the government and submitting complete copies of all internal documents relating to the alleged kickbacks.

Follow Joe Carlson on Twitter: @MHJCarlson

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