BOSTON (Reuters) – Two companies now owned by Medtronic Plc will pay $30.9 million to resolve claims they marketed a medical device meant to treat a vascular defect in the brain for unapproved purposes and paid kickbacks to hospitals to get them to use a second product.
As part of the settlement announced by the U.S. Justice Department on Tuesday, ev3 Inc, a medical device manufacturer now owned by Medtronic, has agreed to plead guilty to a charge related to a neurovascular medical device.
Federal prosecutors in Boston said the plea deal would resolve a misdemeanor charge related to ev3’s marketing of the Onyx Liquid Embolic System from 2005 to 2009 for unproven and potentially dangerous uses.
The U.S. Food and Drug Administration in 2005 approved Onyx for limited use in blocking blood flow to arteriovenous malformations in the brain. But prosecutors said ev3’s sales staff sought to market it for other unapproved uses outside of the brain.
The Minnesota-based medical device maker’s sales force continued to do so even after FDA officials warned ev3 executives in 2008 that they had concerns about the safety of using Onyx outside the brain, prosecutors said.
“ev3 disregarded laws designed to protect patient safety,” U.S. Attorney Andrew Lelling in Boston said in a statement.
The settlement also resolved civil claims that Covidien, another company Medtronic now owns, paid kickbacks to hospitals to induce them to use its Solitaire mechanical thrombectomy device, which was intended to restore blood flow in stroke patients.
Medtronic said in a statement that the conduct at issue predated its ownership of the companies. Covidien acquired ev3 in 2010, and Medtronic in turn acquired Covidien in 2015.
“Medtronic is committed to maintaining the highest standards of ethical conduct and compliance with all applicable regulatory guidelines,” Medtronic said in a statement.
Reporting by Nate Raymond in Boston; Editing by Marguerita Choy and Peter Cooney