Johnson & Johnson subsidiary, PE firm pay $11.5M to settle False Claims Act allegations

Spinal Tech

Johnson & Johnson subsidiary Medical Device Business Services and private equity firm The Gores Group will pay a combined $11.5 million to settle False Claims Act allegations over a drug-device system, the U.S. Attorney's Office for the Eastern District of Pennsylvania announced Nov. 19.

Medical Device Business Services and The Gores Group will pay $10 million and $1.5 million, respectively.

MDBS is accused of promoting Therakos' UVAR XTS and Cellex extracorporeal photopheresis systems for unapproved use from 2006 to 2012. The Gores Group settled allegations that it continued the improper promotion after acquiring Therakos from Johnson & Johnson in 2012.

Therakos allegedly marketed and promoted its ECP system to pediatric patients. The system has never been approved to treat a pediatric population. The allegedly illicit promotion of the device led to providers submitting false claims from three federal healthcare programs.

William McSwain, U.S. attorney, said in a release: "While physicians are free to exercise their independent medical judgment to prescribe medications for uses beyond FDA-approved indications, pharmaceutical and device companies cannot interfere with doctors' judgment by allegedly pushing the sale of their drugs or devices for non-FDA approved uses, especially in vulnerable populations."

The settlement resolved a whistleblower lawsuit. There will be no determination of liability.

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