Medtronic plc and affiliated companies have agreed to pay $4.41 million to resolve allegations that they violated the False Claims Act by misrepresenting the country of origin of certain Medtronic products sold to the United States, the U.S. Department of Justice announced last week.
According to allegations in a lawsuit filed under the False Claims Act, Medtronic made false statements regarding the country of origin of products sold to the U.S. Department of Veterans Affairs and the U.S. Department of Defense.
“Domestic manufacture is a required component of many military and Veterans Administration contracts,” U.S. Attorney Andrew M. Luger of the District of Minnesota is quoted as saying in the announcement. “Congress has mandated that the United States use its purchasing power to buy goods made in the United States or in designated countries. We take that mandate seriously and will not hesitate to take appropriate legal action to ensure compliance.”
According to the settlement agreement, between 2007 and 2014, Medtronic sold to the VA and DoD products it certified would be made in the U.S. or other designated countries. The Trade Agreements Act of 1979 generally requires companies selling products to the U.S. to manufacture them in the U.S. or in another designated country. Medtronic is alleged to have sold to the federal agencies products manufactured in China and Malaysia, countries prohibited under the TAA.
The Medtronic products at issue included anchoring sleeves sold with cardiac leads and used to secure the leads to patients; certain instruments and devices used in spine surgeries; and a handheld patient assistant used with a wireless cardiac device. The agreement covers the period from Jan. 1, 2007, to Dec. 31, 2013, and for one device, the handheld patient assistant, the period from Jan. 1, 2014, to Sept. 30, 2014.
The settlement resolves allegations originally brought in a lawsuit filed by three whistleblowers under the qui tam provisions of the False Claims Act, which allow private parties to bring suit on behalf of the government and share in any recovery. The relators will receive a total of $749,700 of the recovered funds, the announcement states.
“Today’s settlement demonstrates our commitment to ensure that our service members and our veterans receive medical products that are manufactured in the United States and other countries that trade fairly with us,” said Acting Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “The Justice Department will take action to hold medical device companies to the terms of their government contracts.”
Since January 2009, the Justice Department has recovered a total of more than $23.9 billion through False Claims Act cases, with more than $15.2 billion of that recovered in cases involving fraud against federal health care programs, according to the Justice Department.
(Story By The Times Union)