Former Guidant sales rep Kevin Colquitt sued Abbott, Johnson & Johnson (NYSE:JNJ) and Boston Scientific (NYSE:BSX) in 2006 for $219.4 million, 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.
But in April jurors agreed with Abbott’s attorneys, who argued that use of the biliary stents for other conditions was an accepted medical practice and that Medicare knowingly approved reimbursement.
Colquitt appealed last October to the U.S. Court of Appeals for the 5th Circuit, arguing that Lynn (who denied Colquitt’s bid for a new trial in May) made a series of errors including improperly excluding evidence.
But the 5th Circuit appeals bench upheld the lower court’s decision, ruling that Colquitt failed to provide enough specifics about the alleged kickbacks scheme and that Lynn was right to exclude some of the evidence. The appeals court also upheld Lynn’s decision to limit Colquitt’s whistleblower status to the period when he was employed by Guidant.
In January 2014, Abbott paid nearly $5.5 million, but admitted no wrongdoing, to settle a class-action lawsuit that made similar allegations.