WASHINGTON—Quest Diagnostics Inc. will pay $302 million to the United States and its subsidiary Nichols Institute Diagnostics pleaded guilty for misbranding a test that measures parathyroid hormone levels in patients.
The U.S. Department of Justice said in a statement that this settlement is one of the largest recoveries ever in a case involving a medical device. To resolve civil charges, Quest and its subsidiary Nichols will pay the United States $262 million plus interest to resolve False Claims Act allegations that the test gave inaccurate and unreliable results.
Nichols pleaded guilty April 15 to a federal judge in Brooklyn to a felony misbranding charge that violated the Food, Drug and Cosmetic Act. The charge related to the Nichols Advantage Chemiluminescence Intact Parathyroid Hormone Immunoassay, which is a test commonly used by dialysis patients to measure parathyroid hormone levels. Nichols will pay a criminal fine of $40 million as part of the plea. Quest also entered into a non-prosecution agreement.
In addition, Quest has agreed to pay various state Medicaid programs approximately $6.2 million to resolve similar civil claims. The company has also entered into a Corporate Integrity Agreement with the Office of Inspector General of the U.S. Department of Health and Human Services.
The investigation started because of a whistleblower suit brought by Thomas Cantor, who is the founder, president and owner of Scantibodies Laboratory Inc. As a result of the settlement, Cantor will receive $45 million due to a provision in the law that allows whistle-blowers to share part of the settlement.
Cantor told the New York Daily News that he won’t pocket the money, which will be used to fund research to treat drug-resistant infection, such as hepatitis. “It was always about the patients,” Cantor told the New York Daily News. “It broke my heart and was shocking what a company would do for money.”
Five years ago, Cantor and his lawyers sued Quest Diagnostics and its subsidiary Nichols for Medicare fraud.