Abbott settlement
This article was originally published in The Gray Sheet
Executive Summary
One-time charge of $622 mil. will be recorded in the second quarter in anticipation of a settlement of civil and criminal charges related to sales and marketing practices by the firm's Ross Products enteral nutrition division. The charges stemmed from an industry-wide investigation of the enteral nutrition sector, initiated in the mid-1990's by the U.S. Attorney's office in the Southern District of Illinois. The investigation reportedly involved allegations of kickbacks in the form of discounted or free enteral pumps being supplied in exchange for disposable pump set supply contracts with providers; charges for such pumps may have been passed on to Medicare and Medicaid. "The anticipated settlement will resolve all outstanding allegations by the government," including "all federal and state Medicare and Medicaid issues," Abbott says June 26. Headquartered in Columbus, Ohio, Ross drew $688 mil. in earnings last year on $2.1 bil. in sales...