Abbott Labs a Target of Kickback Probe

CHICAGO — The federal government is investigating whether Abbott Laboratories and at least two other medical product makers teamed with health-care providers to defraud Medicare and Medicaid, according to a published report.

The investigation centers on whether the manufacturers engaged in a kickback scheme to encourage hospitals, nursing homes or home-care providers to buy pumps and related supplies used to feed seriously ill people, the Chicago Tribune reported in Thursday’s editions.

Investigators with the U.S. attorney’s officefor the Southern District of Illinois are looking into whether providers overbilled Medicaid and Medicare for products the manufacturers gave away or sold at a discount, the Tribune reported, citing sources it did not name.

A spokeswoman for Abbott’s nutritional products division told the newspaper the probe is widespread. “The investigation is inclusive of the whole industry, which includes manufacturers, distributors and providers,” Mary Beth Arensberg told the Tribune.

Arensberg was unavailable for comment Thursday, and the company said it had nothing to add to her comments.

Swiss pharmaceuticals giant Novartis and the Kendall unit of Bermuda-based Tyco International confirmed they also are being investigated, the Tribune reported.

Medicare is the federal health-care insurance program for the elderly and disabled. Medicaid is a federal and state program offering health insurance for the poor.

Abbott, a leading U.S. maker of health-care products and pharmaceuticals, had $13.75 billion in revenue last year and employs about 60,000 people worldwide.

The Justice Department is investigating whether more than 20 drug companies, including Abbott, inflated prices paid by Medicare and Medicaid.

Abbott has said it also is a target of pricing investigations in five states, including Illinois.

In addition, TAP Pharmaceutical Products Inc., which is 50% owned by Abbott, is under a separate federal investigation of its methods used to market Lupron, a leading prostate cancer treatment.