Feds Nail J&J Subsidiary in $18 Million Settlement of False Claims Charges

sinus medical device
Acclarent marketed the Stratus even after the FDA rejected the company’s 2007 request to expand the approved uses for it.

The U.S. Attorney’s Office in Boston announced on July 22, 2016, that medical device manufacturer Acclarent Inc., has agreed to pay $18 million to resolve allegations that it caused health care providers to submit false claims to Medicare and other federal healthcare programs.

Acclarent — a subsidiary of Ethicon, a Johnson & Johnson company — marketed and distributed the sinus surgery device, the Relieva Stratus, for use as a drug delivery device without U.S. Food and Drug Administration (FDA) approval of that use.

Ethicon is a defendant in Transvaginal Mesh Litigation consolidated in MDL 2327 before Judge US District Court Judge Joseph R. Goodwin the Southern District of West Virginia.

“Marketing medical devices for other than FDA approved uses can expose patients to questionable medical treatments while asking taxpayers to pick up the Medicare cost,” said Special Agent in Charge Phillip M. Coyne of the Department of Health and Human Services Office of Inspector General.  “Our investigators, working closely with our law enforcement partners, will continue to pursue allegations of such misconduct and deter those tempted to launch such illegal scams.”

Marketing device after FDA rejection

Acclarent sold a variety of medical devices used in sinus surgeries, including a device known as the Relieva Stratus MicroFlow Spacer (Stratus).  In 2006, the company received FDA clearance to market the Stratus as a spacer to be used only with saline to maintain sinus openings following surgery.  The government alleged that Acclarent intended for the Stratus to be used instead as a drug-delivery device for prescription corticosteroids, including Kenalog-40, and that the device was specifically designed and engineered for this use.

The government also charged that Acclarent marketed the Stratus as a drug delivery device even after the FDA rejected the company’s 2007 request to expand the approved uses for the Stratus.  For example, Acclarent employees trained physicians using a video that demonstrated the Stratus being used with prescription corticosteroid Kenalog-40 and also used a white, milky substance resembling Kenalog-40 when demonstrating the Stratus.

In 2010, after the acquisition by Ethicon, Acclarent added a warning to its label regarding the use of active drug substances in the Stratus.  By May 2013, Acclarent discontinued all sales of the Stratus and the company agreed to withdraw all FDA marketing clearances for the device, which is no longer commercially available in the United States.  Ethicon also cooperated with the government’s investigation.

On Wednesday, July 20th, Acclarent’s former Chief Executive Officer, William Facteau, 47, of Atherton, California and former Vice President of Sales, Patrick Fabian, 49, of Lake Elmo, Minnesota were convicted of 10 misdemeanor counts of introducing adulterated and misbranded medical devices into interstate commerce.


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