Feds: We got $119m in fraud penalties from medtech companies last year

April 8, 2015 By Brad Perriello Leave a Comment

Federal authorities say they penalized medical device companies to the tune of nearly $119 million for healthcare fraud during fiscal 2014, including the $30 million Boston Scientific (NYSE:BSX) paid to settle a False Claims Act case back in October 2013.

The haul was part of the $2.3 billion won or negotiated by the U.S. Justice Dept. and the Health & Human Services Dept. in healthcare fraud judgments and settlements during fiscal 2014, which ran from October 1, 2013, to September 30, 2014, according to the agencies’ annual report on their joint healthcare fraud and abuse prevention program.

The largest settlement of the $118.8 million-worth made by medtech companies last year was CareFusion‘s $40.1 million agreement to settle a 2-year federal investigation into the marketing of its ChloraPrep antiseptic skin preparation wipes, according to the report.

Boston Scientific’s $30 million deal to settle a FCA suit filed over pacemakers made by its star-crossed Guidant subsidiary was the next largest, followed by Sanofi (NYSE:SNY) subsidiary Genzyme’s plege to pay $22.3 million to settle a whistleblower lawsuit accusing the company of off-label marketing of its Seprafilm surgical product.

Last May Medtronic (NYSE:MDT) agreed to pay $9.9 million to settle a whistleblower’s lawsuit alleging that it ran a years-long kickbacks scheme to induce physicians to use its cardiac rhythm management devices. In August, Smith & Nephew (FTSE:SN, NYSE:SNN) said it would pay $8.3 million to settle a whistleblower’s lawsuit accusing it of passing off devices made in Malaysia as manufactured in the U.S.

Abbott (NYSE:ABT) agreed to pony up nearly $5.5 million last December to settle a class action lawsuit alleging a kickbacks scheme to push the use of its stent products. And Omni Surgical, doing business as Spine360, agreed along with an Indiana spine surgeon to cough up a total of $2.6 million to put to rest FCA allegations that the company dished out kickbacks to induce the doctor to use its products.

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