Dive Brief:
- Abbott Laboratories has agreed to pay a $5.5 million settlement to resolve allegations that it illegally paid physicians kickbacks.
- The U.S. Justice Department had claimed that Abbott had paid the kickbacks to entice physicians to use Abbot's carotid, biliary and peripheral vascular products.
- The suit alleged that Abbott paid high-profile physicians for speaking engagements and teaching assignments, with the understanding that doctors would arrange the hospitals in which they were affiliated to buy Abbott products; the alleged behavior is a violation of the federal Anti-Kickback Statute.
Dive Insight:
The settlement of this suit may make a symbolic point, but it's not going to have any impact on Abbott's overall financial health. (In fact, for a company Abbott's size, it's practically pocket change.) Until the US government figures out how to slap giant companies with serious penalties, they'll have no deterrent effect whatsoever. In fact, such small settlements almost generate a perverse incentive to engage in such behavior and write off any fine as the cost of doing business.