SB Reaches Medicare Settlement In USA

SmithKline Beecham has reached an agreement to pay $325 million as asettlement of allegations that its clinical laboratory business had defrauded the US government. The amount had been provided for as part of a contingent liabilities reserve in 1996.

The charges were made as part of a US government investigation into clinical laboratories, which was initiated in 1992. While few details have been revealed by either the government or the companies involved, the inquiry is thought to have examined the way the laboratories bundle separate blood-chemistry tests together to sell them as a package, even if doctors have not ordered all the tests.

Jan Leschly, SB's chief executive, said: "it is important to understand that SmithKline Beecham Clinical Laboratories never intentionally violated any laws. Part of the problem, not just for SB but for the entire industry, lies in ambiguities over regulations and guidelines."