Pharmaceutical Company to Pay More Than $5 Million for Alleged Kickbacks

Abbott Laboratories has agreed to pay $5.475 million to settle allegations that it paid kickbacks in violation of the Anti-Kickback Act (AKA) to induce doctors to perform surgeries using the company's products. The global pharmaceuticals and healthcare products company is accused of paying prominent physicians for teaching assignments, speaking engagements and conferences in return for the doctors' purchase of Abbott’s carotid, biliary and peripheral vascular products. Such kickbacks consequently led to the submission of false claims to Medicare for the procedures in which Abbott products were used in violation of the False Claims Act (FCA). The allegations against Abbott stem from a lawsuit brought by two former employees pursuant to the FCA's qui tam provisions. Each whistleblower is set to receive a payment of more than $1 million as part of the settlement.

The AKA aims to curtail the corrupting influence of money on healthcare decisions by making it illegal for anyone to pay, receive or solicit compensation in exchange for referrals or the purchase of items or services that may be paid for by a federal healthcare program. Violations are felonies and carry penalties of up to $50,000 per violation. AKA violations are also considered per se violations of the FCA prohibition on knowingly submitting false or fraudulent claims to the government for payment, with the potential for treble damages and penalties of between $5,500 and $11,000 per claim.

Abbott's settlement illustrates the complexity of state and federal laws applicable to the healthcare industry. This makes it crucial that healthcare providers understand these laws and take measures to avoid violations that can lead to potential criminal penalties, civil fines, exclusion from federal healthcare programs and/or the loss of medical licenses.