UPDATE: Quest To Pay $302 Million In DOJ Pact Over Test Kits
15 Aprile 2009 - 7:56PM
Dow Jones News
Quest Diagnostics Inc. (DGX) and its Nichols Institute
Diagnostics unit have agreed to pay $302 million to resolve
criminal and civil allegations regarding various diagnostic test
kits manufactured and sold until 2006, prosecutors said
Wednesday.
In a statement, the U.S. Attorney's Office in Brooklyn said NID
pleaded guilty to felony misbranding related to its Nichols
Advantage Chemiluminescence Intact Parathyroid Hormone Immunoassay,
which was used by laboratories to measure parathyroid hormone
levels in patients. The unit agreed to pay a $40 million fine.
Quest itself entered into a nonprosecution agreement and agreed
to cooperate with the government, prosecutors said. The company had
cooperated with the government's probe since it was initiated in
2004.
Quest and the NID unit also agreed to pay $262 million plus
interest to resolve federal False Claims Act allegations related to
the Advantage Intact PTH assay and four other assays manufactured
by NID that allegedly provided inaccurate and unreliable results,
prosecutors said.
"The American public has the right to expect medical device
manufacturers to make accurate claims in their labeling, especially
when the failure to meet those claims could indicate that the
performance of the device is suspect," said U.S. Attorney Benton J.
Campbell in a statement.
The company has agreed to pay various state Medicaid programs
approximately $6.2 million to resolve similar civil claims,
prosecutors said.
The investigation began as a result of whistleblower lawsuit,
with the whistleblower receiving about $45 million of the recovery,
prosecutors said. In total, it is one of the largest recoveries in
a case involving a medical device, prosecutors said.
"Quest Diagnostics conducts its business with the highest
standards of quality and integrity, and we regard NID's failure to
meet our standards as unacceptable," said Michael E. Prevoznik,
Quest's senior vice president and general counsel "This settlement
resolves a five-year old government investigation, and puts it
behind us. We are strongly committed to fulfilling the terms of the
Corporate Integrity Agreement, and already have in place many of
the agreement's requirements."
In October, Quest announced it had reached an agreement in
principle during third-quarter 2008 to settle the government's
probe. The company previously set aside $314 million in reserves to
cover the settlement.
-By Chad Bray, Dow Jones Newswires; 212-227-2017;
chad.bray@dowjones.com