12.08.14
Stryker Corp., which acquired orthopedic technology firm OtisMed Corp. in 2009, is now paying the U.S. government $80 million to settle civil and criminal investigations connected to the marketing of its Otisknee product. OtisMed is alleged to have sold Otisknee, a knee replacement device, without U.S. Food and Drug Administration (FDA) approval. The settlement is one in a string for Stryker, which recently was ordered to pay out $1.43 billion to settle thousands of lawsuits related to its Rejuvenate and ABGII hip implants.
OtisMed and its chief executive officer, Charlie Chi, 45, pleaded guilty to selling unapproved medical devices in federal court in Newark, New Jersey, on Dec. 8, according to the New Jersey U.S. attorney’s office. Chi is scheduled to be sentenced March 18.
The FDA denied OtisMed’s application for approval in September 2009; however, according to Stryker, the company quickly shipped more than 200 OtisKnee devices anyway. Stryker officials maintain that this activity took place before the acquisition of OtisMed and without the knowledge of Stryker.
Kalamazoo, Mich.-based Stryker will pay a fine of $34.4 million, criminal forfeiture of $5.16 million and a civil settlement of $40 million, according to the U.S. attorney’s office. OtisMed’s illegal sales took place before Stryker bought the company in November 2009.
The company sold more than 18,000 OtisKnee cutting guides - which are designed to help surgeons make accurate bone cuts in knee replacement surgeries - between May 2006 and September 2009, bringing in more than $27 million in revenue, according to a criminal information filed Monday in U.S. District Court in New Jersey. It did not apply for FDA approval for the devices until October 2008, according to the information.
OtisMed and its chief executive officer, Charlie Chi, 45, pleaded guilty to selling unapproved medical devices in federal court in Newark, New Jersey, on Dec. 8, according to the New Jersey U.S. attorney’s office. Chi is scheduled to be sentenced March 18.
The FDA denied OtisMed’s application for approval in September 2009; however, according to Stryker, the company quickly shipped more than 200 OtisKnee devices anyway. Stryker officials maintain that this activity took place before the acquisition of OtisMed and without the knowledge of Stryker.
Kalamazoo, Mich.-based Stryker will pay a fine of $34.4 million, criminal forfeiture of $5.16 million and a civil settlement of $40 million, according to the U.S. attorney’s office. OtisMed’s illegal sales took place before Stryker bought the company in November 2009.
The company sold more than 18,000 OtisKnee cutting guides - which are designed to help surgeons make accurate bone cuts in knee replacement surgeries - between May 2006 and September 2009, bringing in more than $27 million in revenue, according to a criminal information filed Monday in U.S. District Court in New Jersey. It did not apply for FDA approval for the devices until October 2008, according to the information.