Only days after the trial verdict, Acclarent and Johnson & Johnson (J&J) agreed to pay $18 million to settle claims of illegally marketing to the U.S. Department of Justice. The multimillion-dollar settlement joins other massive payouts the company has been ordered to pay this year.
The company received approval for its Relieva Stratus Microflow Spacer, or Stratus for short, to maintain an opening in the sinuses. The company requested additional approval for use as a drug delivery device, but the FDA denied the request.
Without FDA approval, the company still marketed the Stratus as a steroid delivery device. The company and the executives became the subject of a five-year investigation and the executives were indicted on charges of conspiracy, wire fraud, adulteration and misbranding, and illegal marketing. While the agreement will bring an end to the investigation, J&J is facing thousands of lawsuits over many of its other devices.
Monday, July 25, 2016
A federal jury has found two former Johnson & Johnson (J&J) executives guilty of ten counts of illegally marketing a medical device. The executives were acquitted of 14 counts of conspiracy, wire fraud, and felony adulteration and misbranding.
Prosecutors believe the verdict is somewhat disappointing. Last September, Deputy Attorney General Sally Quillian Yates sent a memo urging aggressive pursuit of individuals and corporate wrongdoers in all industries for misconduct. The Department of Justice has targeted healthcare fraud, waste, and abuse for some time now, but after Yates’s memo, attorneys have been turning up the heat.
The executives, William Facteau and Patrick Fabian, were the subjects of a five-year investigation. Factuea was the chief executive and Fabian was the vice president of sales at Acclarent, a subsidiary of J&J. J&J acquired Acclarent in 2010 to produce medical devices for the ear, nose, and throat.
Factuea and Fabian were convicted of illegally marketing a medical device, called the Relieva Stratus Microflow Spacer, for uses not approved by the U.S. Food and Drug Administration (FDA). The FDA approved the device, called the “Stratus” for short, to maintain an opening in the sinuses. The company had requested additional approval for use as a drug delivery device, but the FDA denied the request. Despite this, Factuea and Fabian marketed the device as a steroid delivery device without the FDA’s approval.
Factuea and Fabian managed to escape much more serious charges. While the counts of illegal marketing are only misdemeanors, the two were facing felony charges that could have come with lengthy prison sentences. The misdemeanors carry a maximum of one year in prison per count, but it is unlikely the two will receive the maximum sentence. Defense attorneys for Factuea and Fabian have stated they plan to appeal the misdemeanor verdicts.