Consumer Fraud

Whistleblowers share $1.5 million for exposing illegal kickback scheme at Abbott Laboratories

osha whistle Whistleblowers share $1.5 million for exposing illegal kickback scheme at Abbott LaboratoriesTwo former Abbott Laboratories employees who sued the pharmaceutical giant under the whistleblower provisions of the False Claims Act will share more than $1 million from funds recovered in a December settlement agreement.

Abbott agreed to pay the U.S more than $5.47 million to resolve the whistleblowers’ allegations that it illegally paid kickbacks to prominent physicians as incentive for implanting the company’s carotid, peripheral, and biliary vascular products in patients.

According to the complaint, Abbott paid the doctors for teaching assignments, speaking engagements, and conferences with the expectation that they would arrange for hospitals with which they were affiliated to buy the Abbott products, which are used to treat circulatory disorders and bile duct blockages.

The U.S. alleges that Abbott’s kickback scheme resulted in the submission of false claims to Medicare and other federally funded health care programs.

“Patients have a right to treatment decisions that are based on their own medical needs, not the personal financial interests of their health care providers,” said Stuart Delery, the Justice Department’s Assistant Attorney General of the Civil Division. “Kickbacks undermine the ability of health care providers to objectively evaluate and treat their patients,” he said, adding that the Justice Department would continue to focus on and prosecute kickback schemes that defraud Medicare and put patient’s lives at risk.

“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 of the Eastern District of Tennessee.

Steven Peters and Douglas Gray, who were formerly employed by Abbott, filed the lawsuit under the “qui tam” or whistleblower provisions of the False Claims Act, which allows individuals who have witnessed fraud and other wrongdoing against taxpayer-funded government agencies and programs  to take legal action on behalf of the U.S. In return, whistleblowers are rewarded with up to 30 percent of the recovery.


U.S. Justice Department