Quest Settles False Claims Act suit involving diagnostic test kits

Quest Diagnostics Incorporated and a subsidiary, Nichols Institute Diagnostics (NID), have reached a global settlement with the federal government to resolve both criminal and civil charges surrounding several diagnostic test kits manufactured, marketed and sold by NID. The sizable settlement is one of the largest in a suit involving medical devices.

The kits included the companies’ Nichols Advantage Chemiluminescence Intact Parathyroid Hormone Immunoassay, which was used by laboratories nationwide to calculate parathyroid hormone levels in patients. In connection with that kit, NID pleaded guilty in federal court in Brooklyn to a felony charge of product misbranding in violation of the Food, Drug and Cosmetic Act. Also at issue were NID’s Advantage Intact PTH assay and four other assays that allegedly produced inaccurate and unreliable results. The government alleged that the Advantage Intact PTH Assay produced elevated results, but NID claimed in marketing materials and in product inserts that the tests were accurate. Quest has agreed to pay a hefty amount to resolve federal False Claims Act charges concerning these tests and must also pay several state Medicaid programs to settle similar civil claims.

The United States began its investigation after a Qui Tam suit was filed by whistleblower Thomas Cantor. Under the relevant portions of the False Claims Act, whistleblowers are permitted to file suit on the government’s behalf and then share in the proceeds of any recovery.

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