Abbott Labs settles $421 million fraud case

December 7, 2010

North Chicago, IL based  Abbott Laboratories Inc,  B. Braun Medical Inc. and Roxane Laboratories Inc., have agreed to pay a combined $421 million to settle a federal civil lawsuit. The U.S. government alleged the drugmakers were involved in a scam that deliberately inflated drug prices reported to Medicare and Medicaid programs. The drugs involved in the case include antibiotics, painkillers, injectible agents and nutritional solutions.

Federal prosectuors claimed the Abbott and the other companies created a kickback scheme that allowed doctors and pharmacies to profit by buying the product at one price, while being reimbursed at another.  “Not only did this practice cost our public healthcare programs millions of dollars, it also threatened to undermine the integrity of the choices health care providers made for their patients,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice during a press conference Tuesday.

Under the terms of the agreement, Roxane will pay $280 million, Abbott will pay $126.5 million and B. Braun Medical will pay $14.7 million to resolve the lawsuits.  The settlement is the latest in the government's continued efforts to combat fraud against federal health care programs.

Despite today's settlement, Abbott continues to deny any wrongdoing in the case. “We continue to believe that we have complied with all laws and regulations and have entered into this agreement to eliminate the uncertainty associated with continued litigation, ” said Adelle Infante, spokesperson for Abbott Laboratories.