Acclarent, a Johnson & Johnson subsidiary, had to pay $18 million after it had been accused of marketing medical device that had not been approved by the FDA.
The marketing action resulted in false claims submitted to Medicare and other healthcare programs.
The FDA approval is important to ensure that the health devices that are marketed are safe and medically appropriate. The process is important because it protects patients and limits the danger of financial abuse. The FDA actions restrict the risk of patients getting questionable treatment at the expense of the taxpayers.
The suit was filed by a saleswoman that worked in the company. It seems that the managers at Acclarent instructed the personnel to market the Stratus device as a drug delivery device, whereas the FDA cleared the product to maintain the sinus open after the surgery.
The medical devices in question were involved in sinus operations. The Relieva Stratus MicroFlow Spacer was a product that cleared the sinus. The product received approval only as an adjuvant to a saline cure and had to be used only after the sinus surgery.
However, Acclarent marketed the device as a drug-delivery system for corticosteroids. The device had been redesigned and engineer specifically for the new use, without the FDA approval to do so.
The company’s employees were also training doctors to use Status with corticosteroid Kenalog-40 prescriptions, and they even had a video of the procedure where a white substance was used to explain the illegal use of the device.
In 2007, Acclarent had asked for approval to expand the utilization of the device, but the request had been denied. However, the company continued to market the product even if it had not been approved.
In 2010, Acclarent had added a label warning against the use of Status. However, the evidence showed that the company continued to use the device illegally. In 2013, Acclarent recalled all the products from the market and discontinued the production.
The trial led to the conviction of the former Chief Executive Office and former Vice President of Sales.
The company employee that filed the suit will receive $3.5 billion, aside from interest and legal expenses.
Johnson & Johnson bought Acclarent in 2010. The alleged misconduct took place before the acquisition. A company official declared that the compliance controls had been made tougher.
The trial is a proof of the government’s commitment to combat health care fraud. Starting with January 2009, the Justice Department managed to recover almost $30 billion through False Claims Act cases, out of which $18 billion came from cases involving health care frauds.
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