Justice Department accuses Abbott of fraudulent drug-pricing scheme

WASHINGTON (AP) — The Justice Department is accusing Abbott Laboratories of vastly inflating prices of its drugs as part of a fraudulent billing scheme alleged to have cost government health programs more than $175 million over 10 years.

Abbott bumped up the reported price of the intravenous antibiotic vancomycin as much as 18 times what it charged health care providers, knowing that the Medicare and Medicaid programs would reimburse the providers based on the manufacturer's price, according to a whistle-blower lawsuit unsealed Thursday.

Abbott, based in North Chicago, Ill., participated in such a billing scheme because hospitals, pharmacies and other providers would get to pocket the difference and would be more likely to prescribe the company's products again, the Justice Department contended.

Other Abbott water-based solutions used in administering IV drugs and to replace fluids in the body also were part of the arrangement, the department said.

Abbott spokeswoman Melissa Brotz said the company has complied with all federal laws and regulations. "We have a strong defense and we intend to vigorously defend against these claims," Brotz said.

The lawsuit is the latest in a series of whistle-blower claims against drug manufacturers. Settlements in other cases have totaled more than $3.1 billion in recent years.

The lawsuit originally was filed by Ven-A-Care of the Florida Keys Inc., a small home-infusion company that has won several lawsuits that made similar allegations against other drugmakers. The company would get a portion of any settlement, as allowed under the federal False Claims Act.