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FCPA Blog Daily News

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Monday
Aug012016

Whistleblower collects $3.5 million from Johnson & Johnson unit

A former saleswoman for medical device maker Acclarent was awarded $3.5 million as her share of an $18 million settlement of a whistleblower suit alleging false marketing claims.

Melayna Lokosky made the claims in a complaint filed in federal court in Massachusetts in 2011.

Johnson & Johnson bought California-based Acclarent in 2010.

Acclarent agreed to pay $18 million to resolve allegations that it made false claims about its sinus spacer for use as a drug delivery device without U.S. Food and Drug Administration (FDA) approval.

The company didn't admit liability.

The False Claims Act allows private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery.

Acclarent sold medical devices used in sinus surgeries, including a device known as the Relieva Stratus MicroFlow Spacer (Stratus). 

In 2006, Acclarent received FDA clearance to market the Stratus as a spacer to be used only with saline to maintain sinus openings following surgery. 

The suit alleged that Acclarent intended for the Stratus to be used instead as a drug-delivery device for prescription corticosteroids, including Kenalog-40, and that the device was specifically designed and engineered for that use.     

The government joined Lokosky's False Claims Act suit.

The FDA rejected Acclarent's 2007 request to expand the approved uses for the device, according to the allegations. 

Acclarent continued to market the Stratus for drug delivery even after adding a warning label in 2010 that it shouldn't be used that way, the government said.

For example, Acclarent employees trained physicians using a video that demonstrated the Stratus being used with prescription corticosteroid Kenalog-40 and also used a white, milky substance resembling Kenalog-40 when demonstrating the Stratus.  

The company has now stopped selling the Stratus device.

On July 20, two former Acclarent executives were convicted by a federal jury in Boston of ten misdemeanor counts for introducing adulterated and misbranded medical devices into interstate commerce.

Former CEO William Facteau, 47, of Atherton, California and former Vice President of Sales, Patrick Fabian, 49, of Lake Elmo, Minnesota were found guilty after a six-week jury trial.

They were acquitted of 14 felony charges, including conspiracy and wire fraud.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He'll be the keynote speaker at the FCPA Blog NYC Conference 2016