Biocompatibles to Pay $36M to Resolve False Claims; Whistleblower to Get $5.1M
Pennsylvania-based medical device manufacturer Biocompatibles Inc., a subsidiary of BTG plc, pleaded guilty today to misbranding its embolic device LC Bead and will pay more than $36 million to resolve criminal and civil liability arising out of its illegal conduct, the Justice Department announced last month. LC Bead is used to treat liver cancer, among other diseases.
Under the terms of the plea agreement before the U.S. District Court for the District of Columbia, Biocompatibles pleaded guilty to a misdemeanor charge in connection with the company’s misbranding of LC Bead, in violation of the Food, Drug and Cosmetic Act. LC Bead was cleared by the U.S. Food and Drug Administration (FDA) as an embolization device that can be placed in blood vessels to block or reduce blood flow to certain types of tumors and arteriovenous malformations. LC Bead has never been cleared or approved by FDA as a drug-device combination product or for use as a drug-delivery device or “drug-eluting” bead. As part of the criminal resolution, Biocompatibles will pay an $8.75 million criminal fine for the misbranding of LC Bead and a criminal forfeiture of $2.25 million.
n addition, Biocompatibles will pay $25 million to resolve civil allegations under the False Claims Act that the company caused false claims to be submitted to government healthcare programs for procedures in which LC Bead was loaded with chemotherapy drugs and used as a drug-delivery device. When LC Bead was combined with prescription drugs for use as a drug-eluting bead, it constituted a new combination drug-device product that was not approved or cleared by the FDA and not covered by Medicare and other federal health care programs. The federal share of the civil settlement is approximately $23.6 million, and the state Medicaid share of the civil settlement is approximately $1.4 million.
The civil settlement with Biocompatibles resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. The civil lawsuit was filed in the Western District of Texas and is captioned United States ex rel. Ryan Bliss v. Biocompatibles, Inc., et al. As part of today’s resolution, Bliss will receive approximately $5.1 million from the civil settlement.
The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments. We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud. Read more about our expertise in False Claims Act cases and how you can take action.