Alere To Pay U.S. $33.2 Mln To Settle False Claims Act Allegations

(RTTNews) - Massachusetts-based medical device manufacturer Alere Inc. (ALR) and its subsidiary Alere San Diego have agreed to pay the United States $33.2 million to resolve allegations that Alere caused hospitals to submit false claims to Medicare, Medicaid, and other federal healthcare programs by knowingly selling materially unreliable point-of-care diagnostic testing devices, the U.S. Justice Department announced.

The United States alleged that between January 2006 and March 2012, Alere knowingly sold materially unreliable rapid point-of-care testing devices marketed under the trade name Triage. The Triage devices aided in the diagnosis of acute coronary syndromes, heart failure, drug overdose, and other serious conditions, and the devices were frequently used in emergency departments where timely decisions are critical to ensuring proper patient care.

According to the government's allegations, Alere received customer complaints that put it on notice that certain devices it sold produced erroneous results that had the potential to create false positives and false negatives that adversely affected clinical decision-making. Nonetheless, the company failed to take appropriate corrective actions until FDA inspections prompted a nationwide product recall in 2012. Of the $33.2 million to be paid by Alere, $28.38 million will be returned to the federal government and a total of $4.86 million will be returned to individual states, which jointly funded claims for Triage devices submitted to state Medicaid programs.

The settlement with Alere resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government's recovery. The civil lawsuit was filed by Amanda Wu, who formerly worked for Alere as a senior quality control analyst. As part of resolution, Ms. Wu will receive approximately $5.6 million.

The settlement with Alere was the result of a coordinated effort among the U.S. Attorney's Office for the District of Maryland, the Commercial Litigation Branch of the Justice Department's Civil Division, and the National Association of Medicaid Fraud Control Units, with assistance from the FDA's Office of Chief Counsel, and HHS' Office of Counsel to the Inspector General. The investigation was conducted by HHS-OIG, FDA's Office of Criminal Investigations, and the Department of Defense Criminal Investigative Services.