Vascular Solutions (NSDQ:VASC) issued a special statement this week after the U.S. Justice announced that it had won a $520,000 settlement after accusing the company of selling a medical device without proper FDA approval.
The federal lawsuit, filed by former sales employee Desalle Bui in November 2010 and unsealed in August 2012, alleged that Vascular Solutions illegally marketed its Vari-Lase device for use on perforator veins and that it promoted re-use of its single-use products. The Feds claimed that the misdeeds cost the government some $20 million.
Vascular Solutions issued its own announcement to emphasize that the the company had not admitted any wrongdoing in agreeing to settle the case, adding that "the press release issued … by the Department of Justice contains numerous allegations which the company continues to deny." The company further clarified that the settlement had been decided early this year and disclosed in the company’s previous SEC filings, the only new development being the signing of a formal agreement.
In return for the settlement, the U.S. Attorneys’ Office agreed to dismiss the lawsuit with prejudice and release all other related civil claims, the company added.
The Vari-Lase Short Kit, which has had 510(k) clearance since 2007, is a solid-state diode laser for treatment of varicose veins and varicosities in the great saphenous vein, which runs from the leg to the thigh. The FDA clearance allows Vascular Solutions to market the device only for treatment of the surface or superficial veins in the leg. The company had previously tried and failed to win indication to treat deeper veins because the device failed to meet benchmarks for safety and efficacy, according to the DOJ notice.
Federal authorities maintained that Vascular Solutions had knowingly marketed the device for treatment of deeper veins, thus causing "physicians and other purchasers of the Short Kit to submit false claims to federal health care programs for uses of the Short Kit that were not reimbursable."