On August 19, 2021, Everest Principals filed an amended complaint on behalf of the United States government and several states (including California, Florida, Maryland, New York, Texas, and Virginia) in the ongoing anti-kickback case against Abbott Laboratories. In the complaint, Abbott is accused of participating in a scheme of kickbacks to doctors and hospitals to boost the use of their MitraClip device used in heart procedures to repair leaks to the mitral valve.
According to the relator, a single member Delaware LLC whose sole member was employed by Abbott from August 2015 to April 2017 as a Therapy Development Specialist in its Structural Heart Division. Abbott paid kickbacks to physicians and hospitals – in the form of patient referrals, patient practice building, free patient marketing service, honoraria for sham speaker programs, rewards in the form of clinical trial opportunities, marketing events and consulting services, free lavish meals, and cocktail parties – to induce physicians and hospitals to use the MitraClip device. Therefore, the complaint alleges, Abbott knowingly caused the submission of thousands of false claims for payments to government healthcare programs.
The Kickback Scheme
The relator notes that “through a pervasive kickbacks scheme developed by Abbott management and ratified at the highest levels of the Company, Abbott is developing a loyal stable of referring and implanting physicians and hospitals.” To carry out its referral scheme, Abbott allegedly targets non-implanting physicians (physicians who are not certified to implant the MitraClip device) and induces them through free lunches, cocktail parties, and dinner conferences to refer their cardiac patients to Abbott’s targeted implanting physicians and hospitals for the transcatheter mitral valve repair (TMVR) procedure using the MitraClip device. Abbott also targeted implanting physicians through patient referrals, sham speaker program honoraria, free patient marketing and practice building, and promises to participate in future clinical trials.
According to the complaint, Abbott’s management included the kickback scheme in “almost every aspect of the sales team’s daily jobs,” including ranking physicians based on their ability to make patient referrals and only giving bonuses to sales members for patients who were “referred from a specific group of non-implanting physicians and were steered to management-chosen hospitals and were treated by a specific, targeted group of physicians.”
Abbott also allegedly required sales representatives to organize and pay for lavish lunches and dinners for targeted implanting physicians to build relationships and encourage them to use the MitraClip device.
One example of a management tactic used to get patient referrals for the implanting doctors cited in the complaint was known as “Fill and Empty the Funnel.” Abbott’s National Sales Director would carry a large red funnel to sales meetings and repeatedly say “fill and empty the funnel” to instruct the sales and marketing team how to promote the MitraClip device: the team was to “fill the funnel” with patients referred by non-implanting physicians who were induced to refer with free meals, cocktail parties, and dinner events and then “empty the funnel’ by inducing implanting physicians with the same tactics to treat the referred patients with the MitraClip device.
What About the Compliance Department?
The relator also alleges that despite Abbott’s controls that are reportedly in place to prevent these kickback activities, when the Relator lodged complaints with Abbott’s Office of Ethics & Compliance and Employee Relations Department with specific details about the practice-building activities and kickback scheme, Relator received “no response or indication that an investigation would be conducted to address these practices,” thereby signaling a lack of any effective enforcement of the supposed compliance policies and procedures.
The complaint outlines 31 counts against Abbott, including federal violations and numerous state claims. The plaintiff is seeking damages and civil penalties for each false claim made.