DOJ Fines Medical Device Companies $100+ Million in 2014

An annual report by the Departments of Justice and Health and Human Services identified more than $100 million in fines issued against medical device companies in 2014, according to FierceMedicalDevices. The total includes fines against Carefusion for off-label marketing, Boston Scientific’s Guidant for defective cardiology devices, Medtronic for kickbacks to doctors for pacemakers and Abbott Labs for encouraging the submission of false claims for surgeries to Medicare.

The False Claims Act is one of the primary tools in the government’s arsenal to fight fraud by medical device manufacturers. It has helped the government recover billions of dollars lost to fraud over the past 25 years. It also authorizes the Department of Justice to pay rewards of between 15 and 30 percent of the government’s recovery to whistleblowers who file a qui tam lawsuit and provide evidence of health care fraud.

In other news, recalls of medical devices have fallen by more than 50% in the first quarter of 2015 compared to Q4 2014, when there was a record 968, according to analysis by Regulatory Affairs Professional Society covered by FierceMedicalDevices. The 426 recalls was the second lowest total from the FDA’s data, which includes information going back to 2013. It reversed a trend of gains in three straight quarters.

The total number of devices recalled is not reflected in this information, however. It only measures the number of different models recalled. One model number recall could implicate hundreds or thousands of different devices.

The fall in recalls comes at the same time that medical device manufacturer Olympus has been caught up in the controversy over contaminated duodenoscopes leading to CRE superbug infections. The spread of deadly infections linked to the device and its decision not to seek FDA clearance when it sealed the elevator wire channel has already resulted in patient lawsuits seeking compensation for damages. Our law firm is investigating patient claims of infections caused by these devices.