Alere Settles False Claims Act Allegations for $33.2 Million

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Massachusetts-based medical device manufacturer Alere (acquired by Abbott Laboratories in 2017) and its subsidiary Alere San Diego recently entered into a settlement agreement with the federal government to pay $33.2 million. The settlement stems from allegations that Alere’s faulty diagnostic devices misinformed clinicians, and therefore, led to unnecessary medical care.

According to the United States Department of Justice (DOJ), from 2006 to 2012, Alere sold its Triage-branded devices to hospitals, even though the company was on the receiving end of many customer complaints warning of erroneous results. Those devices were then used in emergency departments to diagnose acute coronary syndromes, heart failure, drug overdoses, and other serious conditions.

Using a sample of a patient’s blood, clinicians could use certain Triage devices to diagnose cardiac conditions. Other devices were used for toxicology testing by collecting a urine sample. According to the government, some of Alere’s devices specifications differed materially from the product labeling, which resulted in certain devices having less precision than was indicated.

One of the issues the DOJ took with Alere was that the company failed to take appropriate corrective actions to solve the problem, though Alere personnel were aware of the issue and the fact that the decreased precision put the company at a considerable regulatory and financial risk. It wasn’t until a United States Food and Drug Administration (FDA) inspection and subsequent recall in 2012 that Alere heeded the warnings.

In that inspection, FDA personnel allegedly identified (1) statistically significant disparities between the actual cardiac Triage Device coefficient of variation (CV) specifications and the CV specifications marketed to clinicians on the product labeling; (2) an unacceptably high degree of variability when conducting quality control testing of the cardiac Triage Devices; and (3) changes to the manufacturing and release specifications for toxicology Triage Devices that resulted in the release to market of certain product lots containing products that potentially had significantly decreased precision. After that inspection, Alere recalled the devices.

According to a settlement agreement, Alere denied the allegations. In a statement, Abbott disclaimed any liability by noting that Alere had agreed to settle this case prior to its acquisition. As is typical, the DOJ noted that the claims resolved are “allegations only, and there has been no determination of liability.”

“Physicians who work to treat patients with suspected myocardial infarctions rely upon devices such as Alere’s Triage Cardiac products for quick and accurate readings,” said Stephen M. Schenning, Acting United States Attorney for the District of Maryland. “When manufacturers such as Alere make changes to the specifications that affect the product’s reliability without informing physicians or the FDA, patient care is put at substantial risk.”

Of the total $33.2 settlement, $28.4 million will go to the federal government while nearly $4.9 million will be returned to individual states that jointly funded claims for Triage devices submitted to state Medicaid programs. Amanda Wu, a former senior quality control analyst for Alere and the whistleblower who filed the suit, will receive approximately $5.6 million.

Wu’s attorneys, Nolan Auerbach & White, released a statement, which in part read, “Previous medical device qui tam cases have exposed manufacturers that sold defective products or marketed their products for unapproved uses. However, in this case, Alere San Diego allegedly knowingly sold unreliable diagnostic devices.”

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