DePuy Synthes, Inc. to Pay $9.75 Million Settlement to Resolve False Claims Act Violations Concerning Alleged Kickbacks

DePuy Synthes, a medical device manufacturer and subsidiary of Johnson & Johnson, has agreed to pay $9.75 million to settle False Claims Act allegations of paying kickbacks to a Massachusetts-based orthopedic surgeon. According to the settlement, DePuy allegedly violated the Anti-Kickback Statute by submitting false claims to Medicare by offering the orthopedic surgeon incentives in the form of free spinal implants and tools for use in surgeries performed overseas to induce the use of DePuy products in surgeries performed in the United States.  Kickbacks are prohibited under the Anti-Kickback Statute (AKS) an analogue to the False Claims Act.

DePuy admitted to giving a Massachusetts surgeon over $100,000 worth of free DePuy products, including cages, rods, screws, plates, and surgical instrumentation, which the surgeon used to perform overseas surgeries for patients who were not Federal health care beneficiaries. The Anti-Kickback Statute was exacted precisely to combat kickbacks in Federal healthcare programs, like Medicare and Medicaid, and as seen in the instant case, even if the kickbacks involved other patients as long as the physician is billing the government for the product with other patients AKS liability is triggered. It ensures that medical decisions are based completely on the best interests of the patients and not for the physician or the pharmaceutical company’s financial gain.

As per the False Claims Act, a private individual, known as a relator,  can file a qui tam lawsuit on behalf of the government, and if the suit is successful the whistleblower may be eligible to receive between 15% and 30% of the government’s total recovery as a whistleblower award. The relator in this case was a former sales representative for DePuy and was eligible for a $1.37 million whistleblower reward.

Special Agent in Charge Phillip M. Coyne of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG) stated, “The American people, as both taxpayers and consumers, expect medical device manufacturers like DePuy to abide by relevant laws and regulations. When such health care companies provide illegal kickbacks in order to boost profits, their actions erode public confidence in the health care system, can compromise the patient-physician relationship, and waste government health program funding.”

Piling on to that comment was former FBI Special Agent Jason T. Brown, who now leads Brown, LLC, a premier whistleblower law firm: “Kickbacks erode public confidence and some of the biggest whistleblower settlements under the False Claims Act were due to unlawful arrangements. For the system to work if you see something, say something.”