Avalign and its Instrumed International subsidiary agreed to pay $9.5 million to settle federal charges that it sold medical devices that weren’t cleared for the U.S. market.
The case, which has already cost Instrumed distributor CareFusion $3.3 million, involves devices that Instrumed claimed as pre-amendment devices that were exempt from FDA regulations instituted in May 1976. In settling the case Instrumed admitted that by 2009 both it and CareFusion were aware that the devices could not be claimed as pre-amendment, with CareFusion repeatedly informing Instrumed that its evidence for a pre-amendment exemption was insufficient.
“Instrumed never provided CareFusion a satisfactory affidavit to justify its claim that the devices qualified for the pre-amendment status exemption,” according to the office of the U.S. district attorney for Southern New York.
Although Instrumed ultimately recalled the devices after a March 2014 warning letter from the FDA, it admitted to selling them from 2007 to 2014, with some customers claiming reimbursement from federal healthcare programs like Medicare. Some $8.1 million of the settlement is going back to the federal government, with the balance going to states affected by the case.
In its May settlement, Becton Dickinson & Co. (NYSE:BDX) subsidiary CareFusion agreed to pay $3.3 million and admitted to buying and selling medical devices that had not received FDA approval of clearance.