Biocompatibles Inc., a Pennsylvania-based medical device manufacturer and subsidiary of British conglomerate BTG plc, pleaded guilty on November 7, 2016 to misbranding its medical device LC Bead. Biocompatibles will pay more than $36 million to resolve criminal and civil liability arising out of its illegal conduct and the whistleblower who originally brought the case will receive $5.1 million.
LC Bead is medical device that is inserted into blood vessels to treat liver cancer and other diseases. However, Biocompatibles regularly marketed the product as a drug-device combination or for use as a drug delivery device despite LC Bead never being approved by the FDA for these purposes. In fact, in 2004 the FDA sought assurances that Biocompatibles would not market the device as a drug-device combination product and Biocompatibles assured the FDA that “under no circumstance” would the company market the device as a drug-device combination. Despite these explicit assurances, two years later Biocompatibles began marketing LC Bead for drug delivery without FDA clearance or approval and without statistically significant evidence to support the effectiveness of such use.
Information of Biocompatibles’ fraud was first brought to the government’s attention by whistleblower Ryan Bliss, who oversaw marketing of Biocompatibles’ medical products in the United States. Mr. Bliss bravely brought this information to light under the qui tam provisions of the False Claims Act, which allows private citizens with knowledge of fraud against the government to file a lawsuit on behalf of the United States and share in any recovery the government makes. The False Claims Act allows the government to recover three times the amount it was defrauded as well as civil penalties for each false claim for payment made by the defendant. The whistleblower, who originally filed the case, is entitled to receive 15-30 percent of the governments recovery and their attorney’s fees. Mr. Bliss will receive $5.1 million as his share of the settlement.
“The FDA plays a fundamental role in ensuring the safety and efficacy of medical devices and drugs in this country,” said U.S. Attorney Richard L. Durbin Jr. of the Western District of Texas. “The FDA approval process and clinical studies serve to ensure that patients receive devices that meet those standards. We will vigorously pursue those who ignore or seek to circumvent these important patient protections.”