NEW YORK – Myriad Genetics announced after the close of the market on Friday that it has settled a qui tam, or whistleblower, lawsuit filed by STF against Myriad and its subsidiary Crescendo Bioscience.
STF, a limited liability company formed in 2015, filed the lawsuit against Myriad and Crescendo in April 2016, in the US District Court for the Northern District of California, alleging that Crescendo violated the federal False Claims Act, the California False Claims Act, and the California Insurance Fraud Protection Act (CIFPA) in its dealings related to the Vectra DA rheumatoid arthritis test dating back to 2010.
In its complaint, STF specifically accused Myriad and Crescendo of violating anti-kickback laws by paying medical practices more than fair-market value for blood draws and promising to limit out-of-pocket costs for patients who received Vectra DA testing. Further, STF alleged that Myriad and Crescendo defrauded the federal and California state governments' reimbursement programs by inappropriately billing them for Vectra DA tests.
"After conducting an investigation of the allegations, in January 2020, the United States Department of Justice declined to intervene in the lawsuit," Myriad said in a statement. "Also, in January 2020, the State of California declined to intervene."
The Salt Lake City-based molecular testing firm said it will pay $45.25 million to the federal and California state governments and $2.75 million to STF's counsel, in exchange for STF dismissing the lawsuit and releasing all claims against Myriad, its affiliates, and employees. The California government has also agreed to dismiss the case and not pursue claims submitted to the state's Medicaid program or under CIFPA related to Myriad and Crescendo's conduct alleged within the lawsuit. Furthermore, the US Department of Justice has approved the settlement of federal claims and the dismissal of the case.
Myriad said it "expressly denies any and all liability for claims alleged in the lawsuit," and that the settlement agreements do not contain any "admission of liability, wrongdoing or responsibility" on its part.
Last year, Myriad announced it was selling Vectra DA, along with certain operating assets and intellectual property related to the test, to Labcorp for $150 million in cash.