Devices

Medical Technology Enforcement Nets $1.9 Billion

Six Skadden Arps attorneys say that from 2014 through 2019 the Justice Department brought enforcement actions against 67 medical technology companies. The actions led to criminal and civil fines and penalties totaling more than $1.9 billion.

“As federal spending on health care increases markedly in response to the Covid-19 pandemic, including a sharp uptick in spending on medical devices and diagnostic and laboratory tests, companies in this space should continue to expect close scrutiny from federal prosecutors, particularly where conduct poses a risk to patient health and safety,” the attorneys write in an online post. “Corporate compliance programs — updated and adapted to address current and emerging risk areas — will be essential in mitigating potential actions.”

The post says that 62 of the 67 settlements involved a civil False Claims Act resolution and 10 involved criminal resolutions. Of the 10, five were exclusively criminal and five had both civil and criminal components.

Kickbacks and inducements continued to be the largest area of enforcement focus over the six years, with 36 resolutions involving allegations or admissions in this area. Some 20 cases involved allegations of improper promotional activities, while nine focused on product quality issues.

The attorneys write that the Justice Department’s enforcement efforts spanned the entire spectrum of the medical technology industry, with resolutions in the past six years involving manufacturers, clinical laboratories, diagnostic testing companies, and vendors of electronic health records software.

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