The Medical Device Amendments of 1976 amended the FD&C Act and established a comprehensive system for the regulation of medical devices intended for human use. The FD&C Act directs the FDA to classify and reclassify devices into one of three regulatory control categories based on the criteria set forth in the FD&C Act: Class I (general controls), class II (special controls), and class III (premarket approval), depending upon the degree of regulation necessary to provide reasonable assurance of their safety and effectiveness .
Medical Equipment Fraud/Device Fraud typically starts with the manufacturer, from failure to report adverse events, to off-label marketing, to providing financial inducements/kickbacks. This often results from c-suite pressure exerted on company employees, particularly the marketing and sales departments, to produce results and cultivate business.
One-third of the market share for medical devices is owned by Medtronic Inc., General Electric Company (GE), and St. Jude Medical Inc. Cardiac rhythm management devices (defibrillators, pacemakers, etc.) are the largest source of revenue for both Medtronic and St. Jude, whereas GE focuses on the manufacturing of diagnostic imaging technologies like CT and MRI machines. When measured in terms of therapeutic area, spending is highest in the following three markets: spinal, cardiovascular, and neuromodulation.
The failure to report adverse events to the FDA as required by law, may be a violation of the False Claims Act. Device fraud can also include manufacturing equipment and devices that deviate from the product’s PMA, or 510-K, or that are made in violation of Good Manufacturing Practices
Medical Equipment Fraud/Device Fraud also occurs when companies align themselves with physicians in a variety of kickback schemes. These relationships could include hiring physicians as “consultants” to help in the designing, testing, or developing of new products. These arrangements can violate the anti-kickback statute, particularly if they implicitly take into account the volume or value of referrals. These schemes can not only involve physicians, but also hospitals and hospital systems.
Kathleen Hawkins, RN MSN, had been employed by Defendant, Catholic Healthcare West (CHW) for approximately 6 years when she decided she had had enough of trying to change the hospital system from within.
CHW, a California not-for-profit corporation that operated hospitals in California, Arizona, and Nevada, was at the time the eighth largest hospital system in the nation and the largest not-for-profit hospital provider in California.
Joe Strom contacted us in 2005. We were very grateful that he did. We immediately formed an all-star legal team and a process to stop a very harmful pharmaceutical marketing strategy. It was this process we set into motion that ultimately returned hundreds of millions of dollars to the U.S. Treasury, and a portion of that, very well-deserved, into Joe’s bank account.
Joe told us a very troubling story about the off-label promotion of a pharmaceutical drug for patients who already suffered from chronic heart failure.
Bruce Moilan was a seasoned hospital systems expert by the time he contacted our Firm. At the time he decided to file his qui tam lawsuit, he was employed by South Texas Health System as a System Director for Materials Management. In this position, he oversaw $24 million in annual purchases of supplies and equipment and helped determine budget, reduction and cost analysis throughout the contract bidding and negotiations process. His job was to insure proper implementation for purchasing, receiving and management of inventory, for McAllen Hospitals, L.P.
“I collaborated with Nolan, Auerbach and White on a broad variety of cases where whistleblowers stepped forward to disclose tactics employed by large companies to influence physicians' medical decision-making in patient care. They provide ample resources to not only optimize their client cases, but in doing so consistently leverage best medical evidence to further patient safety and resource utilization.”
— Fred Polsky M.D., Former Medical Director, CMS Zone 7 Integrity Contractor
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