Johnson & Johnson subsidiary DePuy Synthes, a manufacturer of orthopedic and neurosurgical solutions, is paying $9.75 million to settle allegations that it paid an orthopedic surgeon kickbacks in the form of free spinal implants and tools for surgeries he performed, violating the False Claims Act and the Anti-Kickback Statute (AKS).

As part of the settlement, DePuy admitted that between July 2013 and February 2018, it gave the Massachusetts-based surgeons over $100,000 dollars worth of cages, rods, screws, plates, surgical instruments and other products for free so the surgeon could perform procedures overseas on patients who were not federal healthcare beneficiaries.

The aim was to induce the surgeon to use DePuy products in surgeries performed in the U.S., according to the case, which is captioned, United States et al. ex rel. John Doe v. Johnson & Johnson, et al., No. 17-cv-11502 (D. Mass.).

“We have fully cooperated with the government throughout its investigation of the allegations and were credited for that cooperation in the settlement. This settlement avoids further lengthy legal processes. We are committed to ensuring our employees conduct business in a way that complies with our Credo and with all laws and regulations,” DePuy Synthes told HCB News.

The AKS prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare and other federally funded programs, to ensure that care decisions are made in the patient's best interests.

“When medical devices are used in surgical procedures, patients deserve to know that their device was chosen based on quality of care considerations and not on improper inducements from manufacturers,” said Principal Deputy Assistant Attorney General Brian Boynton, head of the Justice Department’s Civil Division, in a statement.

The suit was filed by Aleksej Gusakovs, a former sales representative for DePuy, under the qui tam or whistleblower provision of the False Claims Act, which allows private parties to file an action on behalf of the U.S. in return for a portion of the recovery.

Of the total, approximately $7.23 million will be returned to the federal government. Approximately $2.52 million will be paid to Massachusetts, which jointly funded claims for surgeries performed with DePuy devices and submitted to the Massachusetts Medicaid program. Gusakovs will receive approximately $1.37 million.

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