Medical device maker Medtronic PLC has entered into three separate legal resolutions with the Justice Department, including a guilty plea and $50.9 million in civil settlements, the company said late Tuesday.
Medtronic has resolved three legal issues with Justice Department, pays $50.9 million
December 6, 2018 at 3:49AM
The three cases all involved schemes to promote sales of medical devices made by Medtronic subsidiaries ev3 and Covidien. All of the alleged activity occurred before Minnesota-run Medtronic acquired the companies in 2015.
Although ev3 did admit criminal wrongdoing in one case, Medtronic did not admit civil liability in the other two. Justice Department officials said the cases were part of their commitment to hold companies accountable for violating laws designed to safeguard health and public funds.
As of Wednesday afternoon, it wasn't entirely clear what alleged conduct Medtronic was resolving as part of the three separate resolutions.
No settlement documents in any of the cases had been publicly filed in their respective federal courts as of Wednesday.
In the first case, the U.S. Attorney's Office in Boston alleged that the sales staff of ev3 — formerly based in Plymouth — coached doctors on how to use a brain-surgery device for unapproved uses.
The device, called the Onyx Liquid Embolic System, is approved to close off blood flow to blood vessels in the brain that are prone to stroke.
The case says sales staff told doctors they could use the Onyx device to close off vessels in other parts of the body, even though the FDA said the device would have a much different safety profile if used outside the brain.
To resolve the case, filed in U.S. District Court in Boston, ev3 agreed to plead guilty to a misdemeanor violation of the Food, Drug and Cosmetic Act, pay a criminal fine of $11.9 million and forfeit another $6 million in profits.
Covidien acquired ev3 in 2010, and Covidien was then acquired by Medtronic in 2015. After the acquisition, Medtronic changed ev3 compensation practices to make sure sales staff is not incentivized to sell devices for unapproved uses.
In a second resolution announced by Justice officials in Washington, Medtronic agreed to pay $13 million to resolve allegations that Covidien used a national device registry called STRATIS as a means to funnel "kickbacks" to hospitals to convince them to buy its Solitaire mechanical thrombectomy device, which can retrieve clots from the brain following stroke.
To resolve that civil case, which remained sealed Wednesday in U.S. District Court in central California, Medtronic agreed to pay $13 million without admitting wrongdoing.
Finally, Medtronic announced that it had agreed to pay $20 million to resolve a Justice Department investigation regarding "various market-development and physician engagement activities" by Covidien and ev3. A Medtronic spokesman couldn't say Wednesday where that case was filed, or whether it remained under seal.
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The Minnetonka-based health insurer says the new contract “ensures continued, uninterrupted network access” to hospitals and clinics at the Bloomington-based health system.
