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Whistleblower awarded $5 million for medical device maker’s false claims

Image courtesy of Biocompatibles Inc.A marketing executive who alleged in a whistleblower lawsuit that a medical device maker lied to the U.S. Food and Drug Administration (FDA) was awarded $5.1 million this week.

Ryan Bliss oversaw marketing of medical products in North America for Biocompatibles Inc. The company is a subsidiary of British medical device maker BTG PLC.

Pennsylvania-based Biocompatibles agreed to pay more than $36 million to resolve criminal and civil liability arising out of its illegal conduct.

Bliss’s qui tam lawsuit alleged that Biocompatibles lied to the FDA about the LC Bead device and sold it in the United States without proper clearance. The device is used to treat liver cancer.

The whistleblower provision of the False Claims Act 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. 

Bliss filed his civil lawsuit in the Western District of Texas. The case was United States ex rel. Ryan Bliss v. Biocompatibles, Inc., et al. 

In a separate criminal case, Biocompatibles entered a guilty plea in federal court in the District of Columbia.

Biocompatibles pleaded guilty to a misdemeanor charge for misbranding LC Bead in violation of the Food, Drug and Cosmetic Act.

The company paid an $8.75 million criminal fine for misbranding LC Bead and a criminal forfeiture of $2.25 million. 

In the civil settlement under the False Claims Act, Biocompatibles agreed to pay $25 million for billing government healthcare programs for LC Bead as an unapproved drug-delivery device. 

The federal share of the civil settlement was $23.6 million and the state Medicaid share of the civil settlement was $1.4 million.

Biocompatibles had told the FDA that “under no circumstance” would the company use the device for drug delivery. 

Two years later, Biocompatibles began marketing LC Bead for drug delivery through the company it hired to carry out its sales and distribution in the United States. 

The distribution company told its sales representatives that LC Bead was “[a] drug-delivery device” and trained its sales representatives to “aggressively penetrate the chemoembolization market.”

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Richard L. Cassin is the publisher and editor of the FCPA Blog.

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