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#AngioDynamics #CivilSuit #Settlement #JimFranco #SpotlightNews
A Colonie company has agreed to pay the U.S. government $12.5 million to resolve allegations it fraudulently promoted its products — LC Bead and the Perforator Vein Ablation Kit — and caused healthcare providers to submit false claims to Medicare, Medicaid and other federal healthcare programs relating to the use of the two devices.
Most of the money, $11.5 million, is to satisfy allegations that the company caused the false claims be submitted for the unapproved drug-delivery device, LC Bead, that was marketed with “false and misleading promotional claims.”
“The Justice Department is committed to holding medical device manufacturers accountable, which includes requiring that they follow all laws designed to ensure that medical devices are safe and effective,” said Acting Assistant Attorney General Chad A. Readler for the Justice Department’s Civil Division. “When manufacturers make misleading statements concerning the use of their products in ways that have not been cleared by the FDA, it undermines patient care. Taxpayers and patients deserve better.”
AngioDynamics, headquartered on Plaza Drive in Latham, which can be seen from the Northway, was founded the research and development of products used in interventional radiology, and began shipping its product in the early 1990s. In 2004, the company began public trading on the NASDAQ and now has distribution points in Hong Kong and Canada.
The government’s claim alleges that from May, 2006 through December 2011, the company was the U.S. distributor for Biocompatibles, the manufacturer of LC Bead, and marketed the device as a way to deliver drugs in combination with chemotherapy drugs.
AngioDynamics claimed LC Bead, which the Federal Drug Administration had twice declined to approve, was “better, superior, safer and less toxic” than alternative treatments, “even though there was insufficient clinical evidence to support the truthfulness of these claims,” according to the Justice Department.
The Justice Department also alleged that the company was “aware that many insurers declined to provide coverage for certain LC Bead procedures and, as a result, instructed healthcare providers to use inaccurate billing codes when submitting claims for such uses.”
“The basic legal rule in this area could be mastered by a third-grader: Don’t lie,” said U.S. Attorney John F. Bash for the Western District of Texas in a statement. “If you do, you will be held accountable. This settlement reflects that.”
The federal share of the civil settlement is about $10.9 million, the state Medicaid share is about $600,000.
AngioDynamics will also pay $1 million to resolve allegations the company caused false claims to be submitted to federal healthcare programs in connection with the use of the Perforator Vein Ablation Kit, later renamed the 400 micron kit.
In 2008, AngioDynamics acquired PVAK as a part of a product suite that utilizes a laser to close or collapse malfunctioning veins. The FDA cleared it for use in treating superficial veins, but AngioDynamics sold it as a way to treat the more complex, and more important, perforator veins.
“Medical device makers have an obligation to provide truthful information to protect both patients and the integrity of government health programs,” said Special Agent in Charge Scott J. Lampert of the U.S. Health and Human Services Department Office of Inspector General. “We will continue to thoroughly investigate health care fraud allegations.”
The civil settlement relating to LC Bead also resolves a lawsuit filed under the whistleblower provision of the False Claims Act by Ryan Bliss, who formerly worked in the marketing departments of both AngioDynamics and Biocompatibles.
As part of the settlement, Bliss will receive approximately $2.3 million.
There have been no determinations of any liability, according to the government.