BROOKLYN (CN) – Quest Diagnostics and its subsidiary Nichols Institute Diagnostics will pay $302 million to settle civil and criminal charges that they misbranded diagnostic test kits they sold throughout the country, federal prosecutors said.
Nichols Institute Diagnostics pleaded guilty to a felony count of misbranding its Nichols Advantage Chemiluminescence Intact Parathyroid Hormone Immunoassay, which measures parathyroid hormone in human patients. Nichols will pay a $40 million criminal fine for this. Quest agreed to cooperate with the government in exchange for not being prosecuted. Quest will pay another $262 million “to resolve federal False Claims Act allegations relating to the Advantage Intact PTH assay and four other assays manufactured by NID that allegedly provided inaccurate and unreliable results,” the U.S. Attorney’s Office said. It added: “Quest has agreed to pay various state Medicaid programs approximately $6.2 million to resolve similar civil claims.”
In announcing the settlement, the prosecutor’s office added: “The civil settlement also resolves allegations that NID manufactured, marketed and sold the following test kits, some of which produced results that were materially inaccurate and unreliable, thereby causing some clinical laboratories that purchased and used these test kits to submit false claims for reimbursement to federal health programs: (a) the ACTH test kit, which was used by laboratories to measure adrenocorticotropic hormone levels in blood samples (between May 1, 2000 and May 31, 2005); (b) the 25-OH-D test kit, which was used by laboratories to measure hydroxyvitamin D levels in blood samples (between April 1, 2002 and April 30, 2006); and (c) the DHEA-S test kit, which was used by laboratories to measure dehydroepiandrosterone sulfate levels in blood samples (between September 1, 2002 and November 30, 2005). With the exception of the admissions made in connection with NID’s criminal plea, Quest denies the allegations made in the civil settlement agreement.”