Medical device manufacturer pays $18 million to resolve False Claims Act suit

posted on:
August 9, 2016

author:
Andrew Brashier

This July, the Department of Justice (DOJ) announced that a subsidiary of Johnson & Johnson agreed to pay $18 million to resolve False Claims Act (FCA) allegations. Acclarent, Inc. (Acclarent) allegedly was marketing and distributing its sinus spacer product for use as a drug delivery device without having the proper approval from the U. S. Food and Drug Administration (FDA). Acclarent was accused of marketing and distributing its sinus spacer product for purposes other than what the FDA approved.

The Food, Drug, and Cosmetic Act, 21 U.S.C. § 352, gives criteria to determine when a drug or device has been misbranded. The Government’s complaint alleges that Acclarent violated 21 U.S.C. § 352 by (1) falsely stating the device’s intended purpose on the label, (2) including inadequate and misleading instructions, and (3) by using promotional material, including the label, boasting the device is effective for the treatment of sinusitis and related sinus illnesses when there is no clinical evidence as to the products effectiveness.

Acclarent, as a result, violated the FCA when it misbranded its device − giving the device a different purpose other than what the FDA approved − because it caused health care providers to submit false claims to Medicare.

Principal Deputy Assistant Attorney General Benjamin C. Mizer stated, “The FDA approval process serves an important role in ensuring that federal health care participants receive devices that are safe, effective and medically appropriate.”

When a patient receives a medical device, that patient should not have to worry whether or not the device has been approved by the FDA. In this case, it was alleged that Acclarent marketed and sold its sinus spacer product for unapproved uses even though the FDA explicitly rejected the company’s 2007 request to extend the approved uses of the devise. As a result of the promotional materials and labeling, the product should have never been introduced into commerce.

This case against Acclarent was filed under the qui tam provision of the FCA. The qui tam provision, also known as the whistleblower provision, of the FCA provides an avenue for ordinary citizens to blow the whistle on fraud. The FCA provides incentives for one to blow the whistle when they have knowledge of someone defrauding the government. These incentives include protection against retaliation and 15 to 30 percent of the funds recovered by the government. In this case, the whistleblower will receive approximately $3.5 million for their participation in the case.

Are you aware of fraud being committed against the federal government, or a state government? If so, the FCA can protect and reward you for doing the right thing by reporting the fraud. If you have any questions about whether you qualify as a whistleblower, please contact an attorney at Beasley Allen for a free and confidential evaluation of your claim. There is a contact form on this website, or you may email one of the lawyers on our whistleblower litigation team: Archie Grubb, Larry Golston, Lance Gould or Andrew Brashier.

Sources:
21 U.S.C. § 352
U.S. Department of Justice

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