Med City News, December 30, 2015 – Pathway Genomics pays more than $4M to settle kickback allegations from DOJ

Posted December 30th, 2015.

As published in Med City News

It’s not just the Food and Drug Administration that’s peeved with Pathway Genomics‘ marketing tactics: The San Diego diagnostics company will pay more than $4 million to settle kickback claims levied by the U.S. Department of Justice – admitting “no wrongdoing,” as it says in a statement.

A spokeswoman for Pathway Genomics says the company has no further comment beyond what was in the release – and “considers this matter closed.”

Specifically, the DOJ says that Pathway incentivized healthcare providers to use its genetic tests, offering reimbursements up to $20 for each saliva kit they used. Doctors received as much as $13,534 for these referrals, the DOJ asserts – and, importantly, were never users of genetic testing until this reimbursement program began.

Pathway Genomics has voluntarily ended its physician reimbursement program.

“While genomic testing is a valuable and relatively recent medical tool, when specialized laboratories pay for referrals they aren’t breaking any new ground but rather engaging in the same old kickback schemes,” Special Agent Chris Schrankof the U.S. Department of Health and Human Services said in a statement.

This past fall, Pathway Genomics faced serious criticism from the FDA, which contended in a warning letter that the company’s liquid biopsy cancer diagnostic was being inappropriately marketed to consumers.

“Kickbacks to health care providers in exchange for patient referrals undermine the medical judgment of physicians and exploit the trust of patients,” U.S. District Attorney Laura E. Duffy said in a statement. “As this settlement demonstrates, this office will continue to aggressively combat fraud against health care programs.”

Pathway is tasked with paying $4,036,622.74 in the civil settlement.

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