Aesculap faced allegations that it sold knee replacement devices that it new would fail prematurely at a higher-than-acceptable rate. This resulted in false claims to Medicare and Medicaid, the DOJ said. According to the DOJ, the settlement also resolves allegations that the company paid unlawful remuneration to a physician to induce him to use the implants.
Finally, Aesculap agreed to a non-prosecution agreement with the U.S. This relates to its distribution of two medical devices without the required FDA clearance.
The DOJ said the settlement resolves allegations that span from July 30, 2010, to June 17, 2023. It alleges that Aesculap sold the VEGA knee system, a line of prosthetic knee implants, “while knowing that it would fail prematurely at a higher than acceptable rate.” This rendered the device “not reasonable and necessary” for use in these procedures.
“Medical device failures — and their potential to harm patients — are of paramount concern to the Department of Justice,” said Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division. “The Department will hold accountable medical device companies that knowingly sell products prone to failure that present risks to patients and waste taxpayer dollars.”
More about the allegations from DOJ against Aesculap
Allegations state that Vega proved prone to loosening from a patient’s bone prematurely, often shortly after surgery. This could lead to pain, instability and difficulty walking, plus a revision surgery. The U.S. claimed Aesculap knew shortly after Vega’s release that the bone cement failed to properly adhere to the implant. Despite this knowledge, it sold the Vega without disclosing the known issues, according to the DOJ.
Additionally, the DOJ claims that Aesculap failed to record, track or report adverse events for Vega, nor did it take the adequate remediation steps. As of April 2024, the company ceased sales of all knee replacement devices, including Vega, in the U.S.
The settlement also resolves allegations that the company knowingly and willfully made unlawful payments to an orthopedic surgeon in Georgia. According to the DOJ, the company paid him with the intent to induce him to use and recommend Vega after he experienced issues with it. Remuneration included consulting payments, free international travel and entertainment, the DOJ said.
Aesculap’s non-prosecution agreement relates to its ELAN-4 Air Drill and the JS Series SterilContainer S2. According to the agreement, the company assigned an employee to bring both devices through the FDA clearance process. However, the employee never submitted documentation to the FDA, then forged multiple documents to feign clearance. That employee previously pleaded guilty to violating the FDCA and received a prison sentence.
The settlement came through claims under the qui tam (whistleblower) provisions of the False Claims Act. John Marien and Michael McGee, the whistleblowers, served as third-party distributors for Aesculap. They each receive a share totaling $4.475 million in connection with the settlement.
