DePuy Synthes Will Pay $9.75M to Settle Kickback Allegations

DePuy Synthes, Inc., the orthopedic subsidiary of Johnson & Johnson, has agreed to pay $9.75 million to settle kickback allegations.

The settlement resolves allegations that DePuy violated the False Claims Act by paying kickbacks to a Massachusetts-based orthopedic surgeon which caused the submission of false claims to the Medicare and Medicaid programs.

According to the Settlement Agreement, the alleged payments were in the form of “free implants and instruments, including cages, rods, screws, plates, and a modular access and retraction system.” In the Settlement Agreement, DePuy admitted that the surgeon used the spinal implants and instruments in surgeries overseas. Per the Department of Justice press release, the free products were given to the surgeon to allegedly “induce that surgeon to use DePuy products in surgeries performed in the United States.”

A majority of the settlement amount, approximately $7.23 million will go to the federal government. According to the plaintiffs, “approximately $2.52 million will be returned to Massachusetts, which jointly funded claims for surgeries involving DePuy devices that were submitted to the Massachusetts Medicaid program.”

The original lawsuit was filed by a former DePuy sales representative. The former sales representative filed the lawsuit under the whistleblower provisions of the False Claims Act. Those provisions allow a private party to file a lawsuit on behalf of the United States. If the government intervenes in the lawsuit and the lawsuit is successfully settled or the government prevails at trial, the whistleblower is entitled to a share of the recovery. In the matter, the former sales representative will receive $1.37 million.

In the Department of Justice press release, Principal Deputy Assistant Attorney General and Head of the Justice Department’s Civil Division Brian M. Boynton commented, “Medical device manufacturers are prohibited from providing free items to induce a physician to use their devices.”

Boynton continued, “When medical devices are used in surgical procedures, patients deserve to know that their device was chosen based on quality of care considerations and not on improper inducements from manufacturers.”