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Jury sides with Abbott in $1 billion fraud case

A Texas jury sided with Abbott Laboratories in a decadelong Medicare fraud case Thursday that could have cost the company as much as $1 billion.

The whistle-blower who filed the complaint alleged that the Illinois-based company improperly marketed bile duct stents for uses not approved by the U.S. Food and Drug Administration, known as off-label use.

Abbott said in a statement it was pleased with the decision in federal court Thursday. "This verdict supports a decadeslong, generally accepted medical practice that benefited tens of thousands of patients."

The whistle-blower, former Guidant Corp. sales representative Kevin Colquitt, alleged that he was supposed to educate physicians on the off-label features, benefits and uses of the company's devices. Guidant's stent business was eventually bought by Abbott.

Colquitt alleged that he was expected to attend live cases with doctors to offer technical support on the use of the products and he never once in two years witnessed the bile duct stents being used for purposes approved by the FDA. He alleged that he and other sales reps were trained to "robotically state" the correct indication for the use of the devices before discussing their off-label uses.

Colquitt alleged that off-label marketing of the device is still the industry standard and called the off-label use and marketing of such stents "rampant."

"The defendants have taken a gamble with the American public's health," he alleged in court documents. "They have chosen to off-label-market these products for a non-indicated use for which they did not have strong scientific evidence regarding either efficacy or safety."

Abbott, however, argued in court documents that Colquitt didn't have the right to sue as a whistle-blower because he sued over information already widely known. Abbott also argued that the law forbids private parties to sue over federal provisions governing medical device approval and promotion.

Abbott also said it didn't defraud Medicare because Medicare does cover physician use of bile stents in off-label procedures.

The trial lasted three weeks, and the jury reached its decision after three hours of deliberation, according to Kirkland & Ellis, the law firm representing Abbott.


Lisa Schencker

Lisa Schencker covers legal issues and enforcement agencies. Before joining Modern Healthcare in 2014, she was an education reporter for the Salt Lake Tribune and before that wrote for the Bakersfield Californian and the Scranton (Pa.) Times-Tribune. She has bachelor’s and master’s degrees in journalism from the University of Illinois at Urbana-Champaign.

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