Biotech kickback scheme backlash

San Diego-based Pathway Genomics Corporation, one of the larger national genetic testing companies, agreed on December 30 to pay $4.04 million to settle claims that it paid improper kickbacks to physicians in exchange for patient referrals.

The settlement resolves U.S. Attorney charges that Pathway offered physicians up to $20 for each saliva kit they collected and submitted to Pathway. The company then received government reimbursements for the tests in violation of the federal Anti-Kickback Statute and False Claims Act. Over time, individual physicians received more than $13,000 for providing the kits to Pathway.

Pathway analyzes a person's risk for certain genetic diseases and gives advice on whether certain medications will respond. The government alleged that Pathway billed the high costs of laboratory of these analyses to federal healthcare programs such as Medicare.