BD’s CareFusion pays $3.3m to settle FCA claims with DoJ

Becton Dickinson & Co. (NYSE:BDX) subsidiary CareFusion has agreed to pay $3.3 million to settle civil fraud claims alleging that it sold products without FDA approval, according to a release from the U.S. Attorney’s Office for the Southern District of New York.

San Diego-based CareFusion faced claims that it bought and sold medical devices not approved or cleared by the FDA, which were then used in procedures by providers who went on to submit reimbursement claims through Medicare and Medicaid, according to the release.

CareFusion agreed to pay the government $3.3 million and admitted to buying and selling medical devices that had not received FDA approval of clearance, according to the DoJ posting.

“Medical devices that do not have the required FDA approval or clearance cannot be bought and sold for use on patients.  When unapproved devices are used in medical procedures, it presents a public health and safety risk, and federal health insurance programs should not foot the bill.  Medical device distributors must follow FDA rules and this Office will continue to hold them accountable when they don’t,” Manhattan U.S. Attorney Geoffrey Berman said in a press release.

In the settlement, CareFusion admitted to selling devices produced by a manufacturer that had not obtained FDA clearance or approval to market between 2007 and 2014, adding that the manufacturer wrongly claimed they were qualified for a pre-amendment status exception. The company went on to sell those devices to hospitals and other healthcare providers, according to the release.

After the manufacturer in question received a warning letter in 2014, CareFusion ceased selling the devices, according to the report.

“Americans rely on FDA oversight to ensure that their medical devices are safe and effective.  When companies sell devices without proper authorization, they may be putting patients’ health at risk.  We will continue to investigate and bring to justice companies that attempt to subvert the regulatory functions of the FDA, which are intended to protect the public health.  We commend the efforts of the Department of Justice for their vigorous pursuit of justice in this matter,” FDA CDRH director Dr. Jeffrey Shuren said in a prepared statement.

Of the $3.3 million settlement, approximately $2.8 million will go to the U.S. while $478,460 will go to states “adversely affected by CareFusion’s conduct,” according to the release.

Earlier this month, Retractable Technologies (NYSE:RVP) said it inked a settlement deal with Becton Dickinson to resolve a long-running suit claiming BD engaged in false advertising, according to an SEC filing.