ACell last week pleaded guilty to a charge that it failed to report a recall of its MicroMatrix wound dressing and settled charges that it violated the False Claims Act, agreeing to pay $15 million to put the matter to rest, the U.S. Justice Dept. said.
Columbia, Md.-based ACell also agreed to abide by a five-year corporate integrity agreement with the Health & Human Services Dept.’s inspector general office requiring it to implement a risk assessment and internal review process to monitor its compliance.
In January 2012, federal prosecutors alleged in the criminal case, ACell “clandestinely” pulled some 30,000 MicroMatrix devices after discovering that the product was contaminated with endotoxins, but failed to let the FDA know about the recall and concealed the reason for it from doctors, hospitals and its own sales force. The company also concealed the recall from doctors who had already used contaminated MicroMatrix devices. ACell agreed to pay $3 million to settle the criminal charge.
In the civil case, prosecutors alleged, ACell began in 2011 to market MicroMatrix for an off-label internal use and in 2012 began suggesting that providers use billing codes that inflated Medicare reimbursement for the devices. The company also allegedly ran a kickbacks program involving entertainment, speaker payments and free product to induce doctors to use MicroMatrix.
ACell agreed to pay $12 million over five years to settle the civil charges, resolving a whistleblower lawsuit brought by former employee John Murtaugh, who is due to receive nearly $2.4 million from the settlement. ACell did not admit any liability in settling the FDA charges.
“The FDA will not tolerate the actions of companies that put patients at risk by failing to report the market withdrawal of their medical devices to the FDA,” acting commissioner Dr. Ned Sharpless said in prepared remarks. “By not notifying the FDA nor being forthcoming about their reasons for the product removal, ACell executives placed profit above patient safety. They risked that doctors would use the devices in procedures that could jeopardize patient health, and violated both the trust of patients and the medical community in their medical device. We will continue to investigate and bring to justice companies that do not follow FDA’s post-market compliance requirements, which are important to ensure the protection of the public health.”
