Whistleblower Leads to $12.5M Medical Device Fraud Settlement

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Settlement Resolves False Claims Act Lawsuit Allegations Medical Device Manufacturer AngioDynamics Fraudulently Mislead Physicians, Encouraged False Claims to Be Filed.

DALLAS – In a United States Department of Justice (DOJ) announcement issued July 19, 2018, AngioDynamics has agreed to pay a total of $12.5 million, resolving allegations that the New York-based medical device maker used misleading marketing practices and caused health care providers to submit false claims to Medicare, Medicaid, and other federal healthcare programs relating to the use of two medical devices, LC Bead and the Perforator Vein Ablation Kit (PVAK).

The settlement is a result of a case brought by whistleblower Ryan Bliss. Mr. Bliss was a senior product manager responsible for the marketing department of Biocompatibles, the British manufacturer of LC Bead, which was distributed in the United States by AngioDynamics. Mr. Bliss is represented by Virginia qui tam attorney Paul Lawrence of Dallas-based Waters & Kraus, LLP and Jeffery A. Newman Esq. of the Newman Law Offices in Boston.

According to the lawsuit, the FDA had only approved the LC Bead for use in “bland” embolization, involving blocking the flow of blood to tumors. However, AngioDynamics allegedly marketed and sold the LC Bead to doctors as a chemotherapy drug delivery device for treatment of various forms of cancer, even though this was not a use approved by the FDA. Similarly, the company’s PVAK device was FDA-cleared only for use in treating superficial veins and was denied for treatment of perforator veins. AngioDynamics rebranded the PVAK and re-issued the product as the 400 micron kit. Certain AngioDynamics personnel allegedly continued to market the device to treat perforator veins and falsely represented to doctors that Medicare would cover this use, despite contrary Medicare coverage restrictions.

Paul Lawrence, lead attorney for the whistleblower, stated that “what was shocking about Biocompatibles’ behavior is that they obtained clearance for marketing LC Bead for one use, knowing full well that 100% of its sales would be for a different and unapproved use.” Mr. Lawrence explained that “the FDA had clearly refused to approve the LC bead as a drug delivery device.” AngioDynamics, Mr. Lawrence said, recklessly marketed the Biocompatibles product in the United States as a drug delivery device without ascertaining that it was actually approved for that use.

The federal share of the LC Bead settlement is approximately $10.9 million, and the state Medicaid share is approximately $600,000. The government previously resolved related criminal and civil claims against Biocompatibles in November 2016.

About Waters & Kraus

Waters & Kraus is a national plaintiffs’ firm with lawyers litigating complex civil matters as well as practicing qui tam whistleblower litigation and False Claims Act litigation nationwide. Based in Dallas, Texas, the firm has offices in Los Angeles, California and by appointment in Illinois. Our attorneys represent whistleblowers exposing fraud and false claims against the government in a variety of matters including government contractor fraud and procurement fraud, healthcare fraud, assisted living fraud, SEC fraud, and Foreign Corrupt Practices Act (FCPA) violations. Contact us at 800.226.9880 to learn more about our practice and our qui tam attorneys.

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