Abbott files suit over diverted diabetes test strips

Abbott Laboratories has filed a federal lawsuit against distributors and pharmacies accusing them of importing and selling products from other countries and selling them illegally in the US.

The company says the diversion activity affects its FreeStyle brand of glucose testing strips used by diabetics and is costing it millions of dollars every year, according to a Courthouse News Service report.

According to the complaint filed by Abbott, a complex network of organisations and individuals have conspired to divert test strips intended for distributed overseas into the US market, where they are not approved for sale.

The strips can be purchased at a lower price overseas, with the difference allowing the defendants to make a hefty profit from their sale in the US. Wholesalers are alleged to be at the centre of the conspiracy, according to the plaintiff.

The diverted test strips are passed on to unsuspecting consumers who receive "insurance reimbursements they are not entitled to," effectively defrauding Abbott itself, other manufacturers of glucose testing kits, and healthcare payers, including insurance companies and the federal Medicare and Medicaid systems.

The case is being brought by Geoffrey Potter, a partner with Patterson Belknap Web & Tyler who chairs the firm's anti-counterfeiting practice team.

Abbott is seeking punitive damages for federal trademark infringement in the suit, which claims the defendants are violating federal anti-racketeering law.