California AG Reaches Settlement With Biotech Company Over Marketing of Its Genetic Testing

Troutman Pepper

[co-author: Stephanie Kozol]*

On September 25, California Attorney General (AG) Rob Bonta announced a settlement with Biora Therapeutics, Inc. (Biora) regarding misleading claims the company made concerning the cost of its genetic testing services. Under the settlement agreement, Biora must waive all California customers’ outstanding debts and pay $200,000 in penalties.

Under Biora’s previous name, Progenity Inc. (Progenity), the company provided genetic carrier tests, cancer screens, monogenic disease testing, and noninvasive prenatal screens. However, a July 2021 investigation by the California Department of Justice’s Healthcare Rights and Access Section found that Progenity made false and misleading representations concerning the cost of its services. This comes after a 2020 multistate settlement in which Progenity agreed to pay $49 million for fraudulent billing and kickback practices.

As part of the California settlement, Biora has agreed to several injunctive terms. These terms include not accepting any further payment from any California resident who paid for genetic testing, restricting marketing and advertising for three years, providing notice to Californians whose debt is waived, and not sharing customer information with credit reporting agencies or collection services.

Why It Matters

This settlement highlights that state AGs have concerns regarding companies’ medical billing practices. State AGs remain committed to ensuring that health care companies are properly advertising the cost of their services and billing accordingly. It also shows the breadth of the AG’s authority to regulate numerous industries, including the health care sector.

*Senior Government Relations Manager

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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