WASHINGTON, April 15 (Reuters) - Quest Diagnostics agreed to pay $302 million to settle charges that a subsidiary knowingly sold test kits that produced inaccurate results, the U.S. Department of Justice said on Wednesday.
The settlement resolves criminal and civil claims related to various diagnostic test kits sold by Quest unit Nichols Institute Diagnostics (NID), the agency said.
As part of the deal, NID agreed to plead guilty to a criminal charge of 'misbranding' a test used by laboratories throughout the country to measure levels of parathyroid hormone.
The Justice Department said NID was aware the test was providing elevated results at times, but continued to say in marketing materials that it produced nearly identical results to another test.
The civil charges involved allegations that NID sold parathyroid test kits despite knowing that 'some of these kits produced results that were materially inaccurate and unreliable,' the agency said.
The payment is one of the largest recoveries in a case involving a medical device, the Justice Department said. The charges were based on a lawsuit from a whistle-blower who will receive about $45 million from the settlement.
Quest said it had previously disclosed the federal investigation and had reserved $302 million for the payments.
'While the company disagrees with and does not admit to the government's civil allegations, it agreed to the settlement to put the matter behind it,' the company said in a statement.
NID was closed in 2006, Quest said.
(Reporting by Lisa Richwine; Editing by Maureen Bavdek and Steve Orlofsky) Keywords: QUEST SETTLEMENT/ (lisa.richwine@thomsonreuters.com +1 202 310 5691; Reuters Messaging: lisa.richwine.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The settlement resolves criminal and civil claims related to various diagnostic test kits sold by Quest unit Nichols Institute Diagnostics (NID), the agency said.
As part of the deal, NID agreed to plead guilty to a criminal charge of 'misbranding' a test used by laboratories throughout the country to measure levels of parathyroid hormone.
The Justice Department said NID was aware the test was providing elevated results at times, but continued to say in marketing materials that it produced nearly identical results to another test.
The civil charges involved allegations that NID sold parathyroid test kits despite knowing that 'some of these kits produced results that were materially inaccurate and unreliable,' the agency said.
The payment is one of the largest recoveries in a case involving a medical device, the Justice Department said. The charges were based on a lawsuit from a whistle-blower who will receive about $45 million from the settlement.
Quest said it had previously disclosed the federal investigation and had reserved $302 million for the payments.
'While the company disagrees with and does not admit to the government's civil allegations, it agreed to the settlement to put the matter behind it,' the company said in a statement.
NID was closed in 2006, Quest said.
(Reporting by Lisa Richwine; Editing by Maureen Bavdek and Steve Orlofsky) Keywords: QUEST SETTLEMENT/ (lisa.richwine@thomsonreuters.com +1 202 310 5691; Reuters Messaging: lisa.richwine.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.