Medical technology and pharmaceutical company Abbott Laboratories agreed to pay the federal government $5.475 million in connection to allegations of a kickback scheme. The case was brought under the False Claims Act.

According to a U.S. Department of Justice press release, Abbott Labs allegedly paid kickbacks to doctors, incentivizing them to push the company’s carotid, biliary, and peripheral vascular products. The alleged kickback scheme involved Abbott paying doctors for teaching assignments, speaking engagements, and conferences where in return the doctors would have their affiliated hospitals purchase Abbott’s products.

The federal government also alleged that this process violated the Anti-Kickback Act and that Abbott filed false Medicare claims for their products’ use procedures.

“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.

The allegations were originally brought forth under the qui tam provision of the False Claims Act by two former Abbott employees, Steven Peters and Douglas Gray. This provision allows whistleblowers to file suit on the federal government’s behalf, and they will receive a portion of any recovery made. In this instance, each will receive over $1 million.  

Although the company was “pleased” to settle to avoid costly litigation, Abbott spokesperson Angela Duff defended the company saying that “Abbott believes its action were appropriate at all times.”

“Whistleblowers are important to these cases as they are vital in preventing companies from committing fraud with near impunity,”  said James Kaufman, a qui tam (or whistleblower) and False Claims Act attorney with Levin, Papantonio P.A. “They serve greatly in helping the federal government police these companies.”

Josh is a writer and researcher with Ring of Fire. Follow him on Twitter @dnJdeli.