Diagnostic Medical Device Maker Alere San Diego Settles Whistleblower Case Over $33 Million

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Today, the national healthcare qui tam law firm Nolan Auerbach & White announces the successful resolution of its client’s landmark civil False Claims Act case against diagnostic medical device manufacturer Alere San Diego, Inc. Formerly known as Biosite, Inc., Alere San Diego, Inc. was a wholly-owned subsidiary of Alere, Inc., until both companies were acquired by Abbott Laboratories in October 2017.

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Our client was the lone relator behind this important qui tam recovery

Today, the national healthcare qui tam law firm Nolan Auerbach & White announces the successful resolution of its client’s landmark civil False Claims Act case against diagnostic medical device manufacturer Alere San Diego, Inc. Formerly known as Biosite, Inc., Alere San Diego, Inc. was a wholly-owned subsidiary of Alere, Inc., until both companies were acquired by Abbott Laboratories in October 2017.

Alere San Diego has agreed to pay the federal government $28,378,893 plus accrued interest to settle the federal False Claims Act allegations. Participating States will collectively receive $4,860,779 plus accrued interest as a result of a Medicaid State settlement. The whistleblower will receive 20% of the total recovery, or approximately $6 million.

This case involves Alere San Diego’s Triage Devices, which are “panels” or “strips,” upon which blood specimens are placed. They are then tested for elevations in the blood for certain cardiac markers (such as Troponin, Myoglobin, or B-Type Natriuretic Peptide.) The Triage Tox Drug Screen utilizes specimens of patient urine to test for the presence of certain drugs.

Both types are typically used in rapid point-of-care testing to aid in the diagnosis of certain diseases and conditions, primarily at or near the site of patient care, including in the emergency department and patient bedside, to aid clinical decision making in patients suspected of, inter alia, acute coronary syndromes, heart failure, drug overdose, and other serious conditions where timely decisions are critical to ensuring proper patient care.    

According to the Settlement Agreement, the federal government contends that between January 1, 2006, and June 12, 2012, it has certain civil claims against Alere San Diego, Inc. relating to, inter alia, the following alleged conduct (hereinafter “covered conduct”):

  • Triage Devices were marketed and sold with product inserts that made representations regarding the device specifications, including the coefficient of variation (“CV”) for each cardiac marker or drug marker measured by the devices. The CV represents a measure of variation for a distribution of test results within a product lot. It is the ratio of the standard deviation to the statistical mean of the test results. With regard to the cardiac Triage Devices, each product insert denoted the relevant CV for each cardiac marker tested.
  • Triage Devices were marketed and sold for which the actual device CV differed materially from the CV representations contained on the product labeling and the 510(k) submissions, and were not compliant with then Current Good Manufacturing Practices.
  • Alere San Diego was aware of customer complaints regarding tests that produced false positives and false negatives that could have been related to the disparity in CV and resulting decreased precision for certain cardiac Triage Devices.
  • Despite customer complaints regarding false positives and false negatives, Alere San Diego failed to take appropriate corrective or preventive actions.
  • The FDA conducted inspections of Alere San Diego facilities in Spring 2012, in which FDA personnel allegedly identified (1) statistically significant disparities between the actual cardiac Triage Device CV specifications and the CV specifications marketed to clinicians on the product labeling; (2) an unacceptably high degree of variability when conducting quality control testing of the cardiac Triage Devices; and (3) changes to the manufacturing and release specifications for toxicology Triage Devices that resulted in the release to market of certain product lots containing products that potentially had significantly decreased precision.
  • On May 22, 2012, June 11, 2012, and and June 12, 2012, Alere San Diego sent “Urgent Medical Device Recall” notices to its customers to notify them that the company was initiating a “voluntary recall” of certain lots of the Triage Devices. Customers were instructed to discontinue use of the affected products subject to the recall.

To resolve these allegations, Alere San Diego has agreed to pay over $33 million, making this False Claims Act settlement one of the largest recoveries involving allegations of unreliable diagnostic medical devices.

The case was brought in June 2011 by our whistleblower-client Amanda Wu, a former Alere San Diego senior process analyst. “Our client was the lone relator behind this important qui tam recovery,” explained Nolan Auerbach & White partner Kenneth Nolan. “As a member of the Quality Control Department, she vowed to protect the health and safety of patients. She honorably fulfilled that pledge with the help of the federal and state governments.”

The False Claims Act allows private citizens with detailed knowledge of fraud to bring an action on behalf of the government and to assist in the recovery of the government’s stolen dollars. The statute allows the government to recover three times the amount it was defrauded, in addition to civil penalties of $5,500 to $11,000 per false claim. Successful whistleblowers can receive between 15 and 30 percent of the governments’ recovery.

The settlement was achieved through the coordinated efforts of the U.S. Justice Department, the Office of Inspector General of the U.S. Department of Health and Human Services, state attorneys general and other law enforcement entities including Medicaid Fraud Control Units, The United States was represented by an exceptional team of government attorneys, led by Deputy Civil Chief Thomas F. Corcoran, U.S. Attorney’s Office for the District of Maryland, and Assistant Director Colin M. Huntley, U.S. Justice Department, Civil Division, Commercial Litigation Branch.

The case is United States, et al. ex rel. Wu v. Alere San Diego, Inc., et al., Case N. GLR-11-CV-1808 (D. Md.). For information about healthcare whistleblower cases, see http://www.whistleblowerfirm.com.

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Jeb White
Nolan Auerbach & White
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