Kickbacks case against Stryker dismissed

SYK logo

A federal judge in Michigan tossed a whistleblower lawsuit against Stryker Corp. (NYSE:SYK) that accused the company of a kickbacks scheme, but gave the plaintiffs a window to amend their complaint.

Judge Robert Jonker of the U.S. District Court for Western Michigan ruled that Robert Laucirica and the U.S. government failed to prove their contention that Stryker sales reps initiated a kickbacks scheme with Dr. Hari Parvataneni, an orthopedic surgeon at the University of Miami’s Jackson Memorial Hospital.

Laucirica, a sales rep for Zimmer Deptula Inc., a distributor for Zimmer Holdings (NYSE:ZMH) based in Ft. Lauderdale, Fla., sold about $100,000 worth of Zimmer products to Parvataneni. When he checked back with the doctor a few weeks later, according to court documents, Parvataneni hadn’t used any of the Zimmer devices. The doctor told Laucirica that Stryker res had taken him to dinner and offered to fund the training of Parvataneni’s residents and research in return for using Stryker products. Laucirica filed a qui tam lawsuit alleging a kickbacks scheme "under which Dr. Parvataneni agreed to use Stryker’s medical devices for implantation into Medicare patients in exchange for Stryker’s agreement to fund the training of Dr. Parvataneni’s residents and various research projects,” according to court documents.

Jonker ruled May 3 that the suit failed to provide enough specifics about the alleged scheme to prove its accusations, because it does not supply any times or places when the alleged kickbacks occurred and doesn’t allege any specific injury from the supposed fraud.

"The skeletal factual allegations in the complaint do not ‘raise a reasonable expectation that discovery will reveal evidence of illegal [conduct],’" the judge wrote. "On the contrary, the conduct Mr. Laucirica describes in his affidavit — the basis of all of his allegations — is neutral on its face and could just as easily support an inference of legality as of illegality. A medical device company’s funding of research and training is not per se illegal. Legality depends on whether the funding was bona fide and in compliance with applicable rules and regulations or whether the funding was simply a cleverly disguised cover for a flat-out bribe or kickback. Nothing in Plaintiff’s allegations make the inference of illegal intent and conduct any more plausible than the inference of legal intent and conduct."

Jonker gave Laucirica and the U.S. government 21 days from the date of his decision to amend their complaint to address its deficiencies.

It’s the second time in as many months that Stryker managed to dodge a lawsuit. In April, a federal judge in Texas tossed a lawsuit against the company over an allegedly defective hip implant, ruling that federal law preempts the suit.

RSS From Medical Design & Outsourcing

  • Molex delivers ISO 13485-compliant, medical-grade surgical cables from its class 100,000 clean room facility
    Molex, LLC operates a fully ISO 146441-1:1999 Class 8-certified clean room, satisfying strict particulate contamination levels specified by ISO-compliant requirements. Located in Thailand, the facility has less than 100,000 particulates (≥0.5µm) per cubic foot of air and manufactures a variety of ISO 13485-compliant medical cables and surgical cables used in operating theatres, hospitals, laboratories and […]
  • Swept-Source OCT: Patent license agreement between Massachusetts General Hospital and Heidelberg Engineering
    Heidelberg Engineering has entered into a patent license agreement with Massachusetts General Hospital (MGH) in Boston. The agreement grants global and exclusive rights to 77 basic patents and patent applications which relate to swept-source OCT technology and its application in ophthalmology. Spectral domain OCT has become indispensable to eye care professionals worldwide to diagnose and […]
  • MIT’s MultiFab presents a stark challenge to incumbent 3D Printer manufacturers’ hardware, software, and business Models
    MIT’s Computational Fabrication Group recently announced the MultiFab, a low-cost 3D printer that can combine up to 10 different resins in one part and also includes a 3D scanning system to identify and fix errors during production. According to Lux Research, these capabilities are rare in commercial 3D printers today due to the manufacturers’ need […]
  • AVX releases Accu-P MP medical grade film chip capacitors for medical devices
    AVX Corporation, a leading manufacturer of passive components and interconnect solutions, has released a new series of thin film chip capacitors specifically designed to meet the demanding performance specifications for implantable medical devices. Delivering extremely tight capacitive tolerances, exceptionally repeatable performance, and remarkably low ESR and high Q at high frequencies—including VHF, UHF, and RF […]
  • RIVANNA commences manufacturing of its Accuro device
    Rivanna Medical announced that it has begun manufacturing its FDA-cleared Accuro device, a handheld and untethered smart-phone-sized device that is designed to guide spinal anesthesia with automated 3D navigation technology in addition to ultrasound imaging of abdominal, musculoskeletal, cardiac and peripheral vascular anatomies. The product will be launched at the ASA annual meeting in San […]
  • FDA seeks public input on Quality Metrics guidance
    by Oliver Wolf, Senior Product Manager, MasterControl In line with the general shift towards risk-driven approaches in the quality management world, FDA is now taking steps towards applying those same principles to its own auditing schedule. At the end of July, the Center for Drug Evaluation and Research (CDER) and the Center for Biologics Evaluation […]
  • First ‘Ear Wear’ for Active Adults Debuts with MDHearingAid FIT
    If you’ve burned out your ears with earbuds, headphones or decades of other audio abuse but aren’t ready for your grandmother’s hearing aids, not to worry! The new MDHearingAid FIT gets you back in the game with a tiny, FDA-registered, one-size-fits-most solution that doesn’t block your ear canal like old-fashioned in-the-ear hearing aids. The FIT feels […]
  • CardioGenics enters into manufacturing agreement with Ontario-based Plasticap
    CardioGenics Holdings, developer for the In-Vitro-Diagnostics (“IVD”) testing market, announced that it has entered into a manufacturing agreement with Plasticap of Ontario, Canada, pursuant to which Plasticap will manufacture CardioGenics’ proprietary self-metering cartridges for its QL Care analyzer. The term of the agreement is three years and the purchase price for each cartridge shall be […]
  • MTD Micro Molding releases micro materials menu
    MTD Micro Molding, a long-time leader in micro-injection molding, has released an updated “Materials Menu” of materials that can be successfully micromolded to help guide engineers at medical device companies. Material selection is a crucial step in product manufacturability. The correct material drives tolerance, dimension, strength, usabality, speed-to-market, design, critical features, and cost. Through MTD’s […]
  • MedTech Chat: Elastic technology for drug delivery
    Dr. Zhen Gu and Dr. Yong Zhu from North Carolina State University are both co-senior authors of a research paper describing their recent work. Dr. Gu, Dr. Zhu and other researchers from North Carolina State University and the University of North Carolina at Chapel Hill have developed a drug delivery technology that consists of an […]
  • B. Braun’s OEM Division offers large bore normally closed low-pressure check valves
    Infusion therapy and pain management device manufacturer B. Braun said today it is offering normally closed large-bore low-pressure check valves through its valve-focused contract manufacturing OEM division. The valves, offered by Bethlehem, Pa.-based B. Braun, are designed for the intermittent injection of fluids during medical treatment and open automatically when pressure is applied. The newly […]

Leave a Reply