Two companies now owned by Medtronic have agreed to pay a total of $31 million to resolve US Department of Justice (DOJ) charges involving marketing violations and kickback schemes.
Medical device maker ev3 has agreed to plead guilty to charges related to its neurovascular medical device Onyx Liquid Embolic System and pay $17.9 million, the DOJ said.
“Despite the FDA‘s limited approval of Onyx, from 2005 to 2009, ev3 sales representatives encouraged surgeons to use Onyx in large quantities for unproven and potentially dangerous surgical uses outside the brain,” the DOJ said in a statement.
Separately, Covidien LP, another company now owned by Medtronic, agreed to pay $13 million to resolve allegations of violations of the False Claims Act resulting from its alleged payment of kickbacks to hospitals to encourage use of its Solitaire mechanical thrombectomy device.
Covidien acquired ev3 in 2010, and Covidien was acquired by Medtronic in 2015.
“Although Medtronic played no role in the criminal conduct, the company has agreed as part of the ev3 criminal resolution to implement new compensation structures to ensure the sales force responsible for marketing Onyx is not incentivized to sell the device for unapproved uses,” the DOJ said.
Medtronic has also agreed to conduct compliance monitoring related to the Onyx sales and marketing components.
In a statement regarding the settlements, Medtronic said, “These two settlements relate to historical conduct that began and largely concluded under legacy Covidien prior to Covidien LP and ev3, Inc. being acquired by Medtronic in 2015.
“Medtronic is committed to maintaining the highest standards of ethical conduct and compliance with all applicable regulatory guidelines. The plea agreement and settlements that the Medtronic entities agreed to all concern matters that took place either largely or entirely prior to Medtronic acquiring the businesses in which the activities took place. Medtronic has made significant investments in ensuring that it fulfils its obligations to all of its stakeholders and to do business the right way,” the statement reads.