Criminal Prosecutions of Abbott Laboratories

In 2009, Abbott Laboratories Inc., agreed to pay the State of Texas and the Federal Govermnent a total of $28.0 million in a Medicaid fraud settlement to resolve its civil liabilities related to the false pricing of certain intravenous drugs and blood products. Under Texas law, drug manufacturers participating in Medicaid are required to report their wholesale and other prices to the Medicaid program. These prices are the basis on which the Texas Medicaid program calculates reimbursement to Medicaid providers. The Federal Government alleged that Abbott falsified price reports and inflated its prices for products that it submitted to the Texas Medicaid program. As a result of the alleged illegal pricing, Texas Medicaid allegedly overreimbursed providers for Abbott's drugs.

In December 2010, Kos Pharmaceuticals, an Abbott subsidiary, paid more than $41 million to resolve criminal and civil liabilities arising from conduct relating to its drugs Advicor and Niaspan. The civil settlement resolved allegations that Kos offered and paid doctors, other medical professionals, physician groups, and managed care organizations illegal kickbacks in the form of money, free travel, grants, honoraria, and other valuable goods and services in violation of the Anti-Kickback Statute (AKS) to get them to prescribe or recommend Niaspan and Advicor. In addition, the settlement resolved allegations that Kos promoted the sale and use of Advicor for use as first-line therapy for management of mixed dyslipidemias (a disruption of the lipids in the blood), a use not approved by the FDA. As part of the global resolution, Kos also entered into a DPA and agreed to the filing of a criminal information charging the company with one count of conspiracy to violate the AKS.

Source: HHS Health Care Fraud and Abuse Control Program, Annual Reporst for FY2009 and 2011

This article was posted on July 15, 2012.

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