AngioDynamics (NSDQ:ANGO) agreed to pay a total of nearly $13 million to settle charges that it broke the False Claims Act for a chemotherapy delivery device and a peripheral vein treatment.
Latham, N.Y.-based AngioDynamics distributed the LC Bead embolization microspheres made by BTG (LON:BTG) subsidiary Biocompatibles. Although cleared for embolizations, the companies allegedly marketed LC Bead from May 2006 through December 2011 as a drug-delivery vehicle for chemotherapy agents, according to federal prosecutors in New York and Texas. The company admitted no liability in agreeing to the settlements, they said.
In October 2016, BTG agreed to pay the U.S. Justice Dept. $36 million to settle a probe into its marketing of the LC Bead microspheres. AngioDynamics agreed to pay $11.5 million for its part in the affair, which allegedly also included false claims that LC Bead was “better,” “superior,” “safer” and “less toxic” than alternatives, “even though there was insufficient clinical evidence to support the truthfulness of these claims,” according to the prosecutors. AngioDynamics also allegedly prompted healthcare providers to use inaccurate billing codes to skirt insurers who refused reimbursement for some LC Bead procedures, they said in statement.
The LC Bead settlement stemmed from a whistleblower lawsuit filed by Ryan Bliss, a former a senior product manager in marketing for both AngioDynamics and Biocompatibles, who is now slated to receive about $2.3 million from the settlement.
“The basic legal rule in this area could be mastered by a third-grader: Don’t lie,”John Bash, U.S. attorney for Western Texas, said in prepared remarks. “If you do, you will be held accountable. This settlement reflects that.”
AngioDynamics also agreed to pay $1 million to settle accusations that it marketed its PVAK, a component in a device designed to collapse malfunctioning superficial veins. After the FDA denied its bid for an additional indication for treating perforator veins, AngioDynamics allegedly recalled the PVAK device and reissued it under the “400 micron” brand.
“Notwithstanding the recall and rebranding, certain AngioDynamics personnel, as part of a continued campaign to market the device to treat perforator veins, falsely represented to providers that Medicare would cover this use despite Medicare coverage restrictions to the contrary,” the prosecutors alleged.
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