A Massachusetts federal judge has granted a request by former Stryker Biotech president Mark Philip to sever charges against him in an ongoing government case that alleges the company, along with former executives, committed conspiracy to defraud the FDA, conspiracy to commit wire fraud and wire fraud.
The decision by U.S. District Judge George O’Toole Jr. means Philip will be able to use communications he had with Stryker Biotech lawyers, which would otherwise fall under attorney-client privilege, in his defense.
Philip was named alongside Stryker Biotech, a division of Stryker Corp. (NYSE:SYK) and sales managers David Ard, Jeff Whitaker and William Heppner, in a grand jury indictment on charges of wire fraud and conspiracy in 2009. Stryker and Philip were also charged with making false statements to the FDA.
The indictment alleged that the defendants were part of a scheme to promote the combined use of a pair of separate bone-healing products, each granted a narrow, provisional “humanitarian device exemption” by the FDA.
Combining the treatments and devices — the OP-1 Implant, OP-1 Putty and the bone void filler Calstrux — caused adverse effects in patients ranging from minor irritations to infections requiring follow-up surgeries. The indictment also charges that Stryker and Philip lied to the FDA about the number of patients treated each year with OP-1 Putty.
In court filings with United Stated District Court for the District of Massachusetts, Philip’s lawyers said the motion was necessary to his defense, which will center on the argument that “he acted in good faith after consultation with [Stryker Biotech] counsel,” they wrote.
“Philip intends to establish at trial that throughout his tenure as President of Stryker Biotech he acted in good faith without any intent to defraud surgeons or the FDA. In other words, Philip intends to challenge the Government’s proof that Philip “knowingly” participated in a scheme to defraud, meaning “voluntarily and intentionally and not because of mistake or accident or other innocent reason.”
Attorney’s for Stryker Biotech supported the motion for severance because the company’s “right to a fair trial would be seriously prejudiced if materials protected by the attorney-client privileged were disclosed.”
It was a point the judge agreed with.
“In this case, there are a number of knowable categories of topics for which Philip has a Sixth Amendment right to present exculpatory material over Stryker Biotech’s attorney-client privilege,” O’Toole wrote. “With respect to those topics, as well as other issues the Government may try to raise at trial, Stryker Biotech has represented to the Court that in order to fairly defend itself in this criminal case it must be entitled to maintain its attorney-client privilege. The only solution to this irreconcilable conflict is severance of Defendant Mark Philip so that he can use exculpatory attorney-client material to defend the charges against him while codefendant Stryker Biotech retains its attorney-client privilege so that it can defend the charges against it.”