Quest Diagnostics Inc. (DGX) and its Nichols Institute Diagnostics unit have agreed to pay $302 million to resolve criminal and civil allegations regarding various diagnostic test kits manufactured and sold until 2006, prosecutors said Wednesday.

In a statement, the U.S. Attorney's Office in Brooklyn said NID pleaded guilty to felony misbranding related to its Nichols Advantage Chemiluminescence Intact Parathyroid Hormone Immunoassay, which was used by laboratories to measure parathyroid hormone levels in patients. The unit agreed to pay a $40 million fine.

Quest itself entered into a nonprosecution agreement and agreed to cooperate with the government, prosecutors said.

Quest and the NID unit also agreed to pay $262 million plus interest to resolve federal False Claims Act allegations related to the Advantage Intact PTH assay and four other assays manufactured by NID that allegedly provided inaccurate and unreliable results, prosecutors said.

"The American public has the right to expect medical device manufacturers to make accurate claims in their labeling, especially when the failure to meet those claims could indicate that the performance of the device is suspect," said U.S. Attorney Benton J. Campbell in a statement.

The company has agreed to pay various state Medicaid programs approximately $6.2 million to resolve similar civil claims, prosecutors said.

The investigation began as a result of whistleblower lawsuit, with the whistleblower receiving about $45 million of the recovery, prosecutors said. In total, it is one of the larges recoveries in a case involving a medical device, prosecutors said.

A Quest Diagnostics spokeswoman didn't immediately return a phone call seeking comment Wednesday.

-By Chad Bray, Dow Jones Newswires; 212-227-2017; chad.bray@dowjones.com