Defective Products

July 8, 2021

Alere Inc. and Alere San Diego Inc. have agreed to pay nearly $39 million to settle allegations of knowingly selling defective blood coagulation monitors, which are used to determine safe dosages of anticoagulant drugs, to Medicare beneficiaries.  Too much anticoagulant could result in massive bleeding, while too little can result in blood clots and strokes.  By 2008, Alere had allegedly become aware of the fact that the software used in its INRatio monitors contained a material defect that caused some patients to see inaccurate results.  Although the company was also aware of dozens of deaths and hundreds of injuries associated with the devices, it failed to take them off the market and even continued to bill Medicare for them, in violation of the False Claims Act, until the FDA requested a Class I recall in 2016.  USAO NJ

March 23, 2021

Medical device manufacturer Boston Scientific Corporation has agreed to pay $188.6 million to 47 states and the District of Columbia to resolve allegations concerning its transvaginal surgical mesh, which were found to be deceptively marketed in violation of consumer protection laws and allegedly caused serious complications for thousands of women nationwide.  As part of the settlement, Boston Scientific also agreed to implement various marketing, training, and clinical trial reforms.  Similar settlements were previously reached with other medical device manufacturers, including Johnson & Johnson, which paid $116.9 million in 2019, and C.R. Bard, which paid $60 million in 2020.  CA AG; FL AG; NY AG

September 24, 2020

Transvaginal surgical mesh device manufacturer C.R. Bard, Inc. and its parent company, Becton, Dickinson and Company, have agreed to pay $60 million to 48 states and the District of Columbia to resolve allegations of deceptively marketing the devices.  The company’s surgical mesh—which are permanently implanted to hold up falling organs, and which are extremely difficult or impossible to remove—had life-altering side effects that they failed to disclose, including chronic pain, recurring infections, and shrinking tissue.  Although the devices were taken off the market in 2016, under the terms of the settlement, C.R. Bard and Becton, Dickinson and Company are required to adhere to certain injunctive terms if they choose to reenter the market.  The funds received as part of this settlement will be added to a larger restitution fund that was established after settlement of a similar case with Johnson & Johnson in 2019.  CA AG; FL AG; WA AG

July 24, 2020

Several divisions of pharmaceutical company Indivior, which marketed of the opioid-addiction drug Suboxone, pleaded guilty to felony healthcare fraud, entered into a five-year Corporate Integrity Agreement, and will pay a total of $600 million in criminal fines, restitution, civil damages, and penalties.  In six separate cases brought by whistleblowers, Indivior was also alleged to have caused false claims to be submitted to government healthcare programs including by promoting the sale of Suboxone to physicians who were prescribing it outside of medically accepted indication, misrepresenting the likelihood of Suboxone being diverted, and taking steps to delay generic competition for Suboxone. Indivior admitted making false statements about the safety of the film version of Suboxone in order to promote its sale.  In addition, the FTC claimed that violated antitrust laws through a deceptive scheme to thwart lower priced generic competition with Suboxone.  The total settlement consists of criminal restitution of $289 million; a civil settlement of $300 million, with $209.3 million paid to resolve claims by the federal government and $90.7 million to participating states; and, $10 million in penalties to the Federal Trade Commission.  The settlement also requires Indivior to take steps including the dissolution of its Suboxone sales force. Indivior was until 2014 a subsidiary of Reckitt Benckiser Group PLC, which previously paid $1.4 billion to resolve claims related to Suboxone marketing.  DOJ; USAO NJ; FTC

January 30, 2020

Johnson & Johnson has been ordered to pay $344 million to the State of California for misrepresenting the safety of its pelvic mesh implants, which were sold from 2008 to 2014 and have resulted in over 35,000 personal injury lawsuits nationwide.  The State of California brought suit in 2016 after finding the company failed to inform patients and their doctors of possible severe complications, including chronic pain and permanent dysfunctional elimination.  Johnson and Johnson previously settled similar allegations with some 40 other states, for $117 million, in October of last year.  CA AG

October 17, 2019

Johnson & Johnson and its subsidiary, Ethicon, Inc., have agreed to pay $116.9 million to 41 states and the District of Columbia for endangering the health of women nationwide by deceptively marketing transvaginal surgical mesh devices and failing to adequately disclose possible serious complications.  A multistate investigation found that both Johnson & Johnson and Ethicon knew of the risks—including chronic pain and inflammation, fistula formation, incontinence, and mesh extrusion and erosion into the body—yet failed to warn consumers or their physicians.  As part of the settlement, the companies must refrain from falsely describing the mesh as “FDA approved,” as well as provide full disclosure of the device’s risks.  DE AG; PA AG; MI AG; NY AG; SC AG; TX AG

March 23, 2018

Massachusetts-based medical device manufacturer Alere Inc. agreed to pay $33.2 million to resolve allegations that Alere violated the False Claims Act by causing hospitals to submit false claims to Medicare, Medicaid, and other federal healthcare programs by knowingly selling unreliable point-of-care diagnostic testing devices marketed under the trade name Triage. According to the government, Alere received customer complaints that put it on notice that certain devices it sold produced erroneous results that had the potential to create false positives and false negatives that adversely affected clinical decision-making. Nonetheless, the company failed to take appropriate corrective actions until FDA inspections prompted a nationwide product recall in 2012. The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by Amanda Wu, who formerly worked for Alere as a senior quality control analyst. She will receive a whistleblower award of roughly $5.6 million from the proceeds of the government's recovery. DOJ

January 19, 2018

A federal court in New Jersey imposed a $5 million civil penalty and entered a permanent injunction against Dr. Reddy’s Laboratories Inc., the North American subsidiary of Indian pharmaceutical company Dr. Reddy’s Laboratories Limited, for failing to comply with the Poison Prevention Packaging Act (PPPA) and the Consumer Product Safety Act. Specifically, the company distributed household oral prescription drugs in blister packs that were not child resistant as required by the PPPA and despite being warned by its own employees that the blister packs had not been tested for PPPA compliance and that certain blister packs were expected to fail the PPPA’s child test protocol. DOJ

December 13th, 2017

Illinois announced a $12 million settlement with a company that manufactures a device used primarily in spinal surgeries. The settlement with Medtronic Sofamor Danek, Inc. and Medtronic Sofamor Danek USA, Inc. (Medtronic) resolves allegations that the company misled consumers about the safety of its Infuse® Bone Graft Device. According to Madigan’s complaint, Medtronic used deceptive company-sponsored scientific literature to make false and misleading claims about Infuse’s safety, effectiveness and quality. The false marketing created an artificial demand for Infuse in a range of fusion surgeries. The company’s fraudulent conduct was the subject of a 16-month investigation by the U.S. Senate Finance Committee. IL