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Quest Diagnostics to Pay U.S. $302 Million to Resolve Allegations That a Subsidiary Sold Misbranded Test Kits
Date:4/15/2009

Quest Subsidiary, Nichols Institute Diagnostics, Pleads Guilty to Felony Misbranding

WASHINGTON, April 15 /PRNewswire-USNewswire/ -- Quest Diagnostics Incorporated and its subsidiary, Nichols Institute Diagnostics (NID), have entered into a global settlement with the United States to resolve criminal and civil claims concerning various types of diagnostic test kits that NID manufactured, marketed and sold to laboratories throughout the country until 2006, the Justice Department announced today. The payment of $302 million will resolve these allegations and represents one of the largest recoveries ever in a case involving a medical device.

As part of the criminal resolution, NID pleaded guilty today before U.S. District Judge Sterling Johnson Jr. in Brooklyn to a felony misbranding charge in violation of the Food, Drug and Cosmetic Act relating to NID's Nichols Advantage Chemiluminescence Intact Parathyroid Hormone Immunoassay, a test that was used by laboratories throughout the country to measure parathyroid hormone (PTH) levels in patients. As part of the plea, NID will pay a criminal fine of $40 million. Quest has also entered into a non-prosecution agreement with the United States.

As part of the civil settlement, Quest and NID will pay the United States $262 million plus interest to resolve False Claims Act allegations relating to the Advantage Intact PTH assay and four other assays manufactured by NID that allegedly provided inaccurate and unreliable results. 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 United States commenced its civil and criminal investigation after the filing of a qui tam or whistleblower suit brought by Thomas Cantor. As a result of
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SOURCE U.S. Department of Justice
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