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# Firm to Pay $38.5 Million Over Failed Knee Implants
- URL: https://www.fdaweb.com/firm-to-pay-38-5-million-over-failed-knee-implants/
- Published: 2025-11-19T12:00:00.000Z
- Updated: 2026-09-14T15:27:01.000Z
- Author: David McFarland
- Tags: Devices, #legacy-id-D5160251

Aesculap Implant Systems has agreed to pay $38.5 million to resolve federal allegations under the False Claims Act that it knowingly sold defective knee replacement implants and provided unlawful kickbacks to a surgeon. The Pennsylvania-based medical device company also entered into a non-prosecution agreement for distributing two devices without the required FDA clearance, according to a Justice Department [release](https://www.justice.gov/opa/pr/aesculap-implant-systems-agrees-pay-385m-resolve-false-claims-act-allegations-related-knee?ref=fdaweb.com).

The government alleged that, for more than a decade, Aesculap marketed its VEGA System Knee System despite internal knowledge that the implants were prone to early failure. According to the settlement, the devices had a history of becoming loose from patients’ bones shortly after surgery, causing pain, instability, difficulty walking, and frequent follow-up surgeries to remove and replace the device.

Federal prosecutors said Aesculap failed to disclose the known adhesion problem between the implant and bone cement, did not adequately track adverse events, and continued selling the device until April 2024, when the company halted U.S. sales of all its knee implants.

The government also alleged that Aesculap provided improper payments and perks to a Georgia orthopedic surgeon who had experienced failures with the VEGA implant. According to the complaint, the company offered consulting fees, international travel, and entertainment to induce the surgeon to continue using and recommending the device — conduct that prosecutors say violated the federal Anti-Kickback Statute.

In a separate resolution, Aesculap agreed not to contest federal findings that it introduced two unapproved medical devices into interstate commerce in 2017: a high-speed surgical drill and a sterilization container. An employee responsible for obtaining FDA clearance never submitted the required paperwork and instead forged documents indicating the devices had been cleared. That employee has since pleaded guilty and received a prison sentence.