Wright Medical transcends deferred prosecution agreement in federal kickbacks beef

October 9, 2012 By MassDevice staff Leave a Comment

Wright Medical (NSDQ:WMGI) is finally off the hook in a years-long federal beef over accusations that the company engaged in an illegal kickback scheme.

The orthopedics devices maker announced that it fulfilled its agreement with the U.S. Attorney’s Office for the state of New Jersey and has received a dismissal notice for a complaint filed in court.

Wright in 2010 paid nearly $8 million and signed a deferred prosecution agreement, without admitting to any wrongdoing, to settle federal charges that it operated a kickbacks scheme to drive sales of its hip and knee implants.

The feds charged Wright with using consulting gigs with physicians to funnel alleged kickbacks to the docs. The settlement included a year-long probation of sorts, during which former U.S. Attorney James Tucker and a monitoring team helped "instill and implement a compliant corporate culture," according to a Dept. of Justice statement.

During the probation period, the Attorney General’s office promised not to prosecute the company further as long as Wright toed the line.

In April 2011, a surprise shakeup in Arlington saw the abrupt resignation – without severance – of former Wright CEO Gary Henley and the outright firing of CTO Frank Bono, who was discharged "for failing to exhibit appropriate regard for the company’s ongoing compliance program." Three other senior executives resigned the next month.

In May 2011 the company provided written notice to the monitoring team after it discovered "credible evidence of serious wrongdoing," according to a regulatory filing. The DPA monitoring period was extended until September 2012.

The feds responded that Wright "knowingly and willfully committed at least 2 breaches of material provisions of the DPA."

"During the past 24 months, Wright Medical has worked with James Tucker and his monitor team to instill and implement a compliant corporate culture," First Assistant U.S. Attorney Gilmore Childers said in prepared remarks. "We are pleased to announce that Wright Medical has fully complied with the terms of the DPA and we have accordingly moved today to dismiss the Criminal Complaint. We hope that the company continues its current trajectory and will serve as an industry leader in corporate compliance."

Wright Medical still bears obligations under a 5-year Corporate Integrity Agreement signed with the Office of the Inspector General of the U.S. Dept. of Health & Human Services, according to SEC filings. The CIA expires September 19, 2015.

WMGI shares sank 1.9% today, trading at $21.52 as of about 3:35 p.m.

NEW! Technology Track at DeviceTalks Boston

These featured panels at DeviceTalks Boston will explore the state of R&D at major medtech firms, as well as the latest trends when it comes to developing combination products, neuromodulation devices, robotic systems and women's health technology.

View Technology Track Featured Sessions

Register today to save. Use code TECHTRACK to save an additional 10%.

ValenTx raises $10.3 million for implantable gastric bypass device
Startup ValenTx has attracted nearly $10.3 million from 32 investors, according to a filing with the Securities & Exchange Commission. The Maple Grove, Minn. company is developing a removable gastric bypass device as an alternative to Roux-en-Y gastric bypass surgery. It raised $10,271,050 in the round begun July 18, 2018. The ValenTx endoluminal bypass therapy […]
GW Plastic wins Vermont Business Growth Award and workforce development grants
GW Plastics recently announced that it has won the 2018 Vermont Business Growth Award, as well as two workforce development training grants. The annual Vermont Business Growth Award is presented by the Vermont Business Magazine and KeyBank and acknowledges the top Vermont businesses that have had the greatest growth over the last five years. This […]
FDA clears CoreLink’s new spinal implant
Spinal implant maker CoreLink has landed FDA 510(k) clearance for a new anterior lumbar (ALIF) interbody device. The Foundation 3D ALIF uses the company’s proprietary mimetic metal technology, which mimics natural bone characteristics, including 100% open-pore architecture and micro-roughened porosity with hydro-wicking properties. The new ALIF design also has patent-pending technology that creates a combination of […]
Syneo receives patent in China
Syneo recently received a patent in China for its Servo Electric Press Two-Stage Force technology. The patent gives the company the rights to use its two-stage force measuring system in manual electric press and automatic electric press (press-fit) machine applications. The patent protects the company’s technology that is featured in the two-stage force measuring system […]
FDA approves first generic Epipen
The FDA this week approved the first generic version of Mylan‘s (NSDQ:MYL) Epipen emergency allergy auto-injector. Teva Pharmaceuticals (NYSE:TEVA), which won the historic approval, plans to market the generic epinephrine auto-injector in 0.3mg and 0.15mg doses. There are other epinephrine auto-injectors on the market in the U.S., but Teva’s is the first that’s approved to directly substitute […]
FDA finalizes streamlined bundled, quarterly MDR reporting system
The FDA today announced it finalized its new Voluntary Malfunction Summary Reporting Program intended to streamline medical device manufacturer malfunction reporting. The program was created in part through public comments received by the FDA and is intended to allow manufacturers to report “certain device malfunctions in summary form on a quarterly basis” instead of an […]
Lessons learned: How Jeff Karp stays at the forefront of innovation
Serial entrepreneur Jeff Karp has a philosophy for his laboratory: find important problems and get solutions to people quickly. To learn about the exciting technologies emerging from Karp’s lab, join us at DeviceTalks Boston on Oct. 8-10. After Jeff finished his PhD in chemical and biomedical engineering at the University of Toronto, he knew he wanted […]
Bone Index wins CMS coverage for osteoporosis diagnostic device
Finnish orthopedic device manufacturer Bone Index said it has won Medicare and Medicaid coverage for its Bindex point-of-care osteoporosis measurement device for ambulatory surgical and outpatient settings. Bindex measures the cortical bone thickness of the tibia and an algorithm calculates the density index, a parameter that estimates bone mineral density at the hip as measured […]
SPR Therapeutics’ new PNS system wins FDA nod
The FDA has approved SPR Therapeutics’ (Cleveland) Sprint endura (single lead) and extensa (dual lead) peripheral nerve stimulation (PNS) systems. The minimally invasive Sprint system is the only FDA-approved percutaneous PNS system that is indicated for up to 60 days in the back and/or extremities for both chronic and acute pain and is the industry’s only […]
How an integrated data platform can reshape the medical device industry
As big data grows and competition rises, stricter regulatory guidance looms Today’s medical device industry is being transformed by the generation and analysis of vast amounts of data. However, the traditional approaches to data collection and analyses in clinical trials don’t necessarily apply. Along with this massive volume of siloed, disparate data comes unique […]
Report: FDA’s Gottlieb says pediatric device approvals are lagging
FDA head Scott Gottlieb said that over the past 10 years there have been “far too few” devices hitting the US market designed specifically for a pediatric population, according to a recently posted Regulatory Affairs Professionals report. The statement came at a two-day FDA workshop this week, according to the report. Read the whole story on […]