Plaintiff Kevin Colquitt, a former rep for Abbott’s Guidant division, sued Abbott, Johnson & Johnson (NYSE:JNJ) and Boston Scientific (NYSE:BSX) in 2006, claiming that they marketed the use of biliary stents to treat peripheral artery disease. (The magistrate overseeing the lawsuit, Judge Barbara Lynn of the U.S. District Court for Northern Texas, later let J&J and Boston Scientific off the hook.)
Abbott acquired Guidant’s stents business in 2006 as part of Guidant’s acquisition by Boston Scientific. Colquitt’s qui tam lawsuit alleged that Abbott defrauded Medicare when it filed claims covering the use of biliary stents in peripheral interventions.
Colquitt sought damages of $219.4 million, which could have been tripled to $658.2 million, plus $11,000 for each of the alleged 35,297 instances of wrongly coded Medicare bills. All told, the lawsuit could have cost Abbott more than $1 billion had the jury found the other way.
Instead, jurors agreed with the company’s attorneys, who argued that use of the biliary stents for other conditions was an accepted medical practic and that Medicare knowingly approved reimbursement, according to Bloomberg. A Medicare review in 2008 made no change in coverage of biliary stenting procedures, Abbott lawyer James Hurst told the jury yesterday.
“There was no Medicare fraud,” Hurst said. “Medicare paid with full knowledge biliary stents were being used as the standard of care.”
“If the government believed there was fraud, wouldn’t you think they’d stop paying?” he added. “No, they didn’t, year after year.”
“This verdict supports a decades-long, generally accepted medical practice that benefited 10s of thousands of patients,’’ Abbott spokeswoman Elissa Maurer told the news service via email. “We’re pleased with the jury’s decision.”
Colquitt’s lawyer, Chris Hamilton, said he plans to appeal.
“We believe the evidence supports a finding that Abbott knowingly marketed and billed Medicare hundreds of millions of dollars in stents for unapproved uses that were not eligible for reimbursement under the rules,” Hamilton told Bloomberg.
“The defendants had no clinical trial data that their devices were safe and effective,” he told the jury yesterday. “They didn’t start a clinical trial. They never attempted a clinical trial.”
“Medicare does not assume a device is safe and effective. You have to have the evidence,” Hamilton said.
In January 2014, Abbott paid nearly $5.5 million, but admitted no wrongdoing, to settle a class-action lawsuit that made similar allegations.