NuVasive Inc. Pays $13.5 Million to Settle Whistleblower Case

August 10, 2015 — Kevin J. Ryan, of Frederick, MD, a former sales agent for NuVasive Inc., a medical device company, was awarded $2.2 million for blowing the whistle on NuVasive for off-label marketing. Specifically, Ryan accused his former employer NuVasive of marketing its spinal treatment device for surgical uses that were not approved by the U.S. Food and Drug Administration (FDA) and for “improperly inducing doctors to treat patients with it at several Maryland hospitals,” including Johns Hopkins, St. Agnes, Montgomery General and Howard County General.

The case alleged that between 2008 and 2013, NuVasive promoted the use of the CoRoent System for surgical uses that were not approved by the FDA, including for use in treating severe scoliosis and severe spondylolisthesis, two severe spine deformities. As a result of this conduct, the case alleged, NuVasive caused healthcare providers and hospitals to submit false claims to government health care programs for spine surgeries that were not eligible for reimbursement.

The settlement also resolves allegations that NuVasive knowingly paid illegal remuneration or kickbacks to physicians to induce them to use the CoRoent System in spine fusion surgeries, in violation of the federal Anti-Kickback Statute. This illegal remuneration included promotional speaker fees, honoraria, and paid expenses relating to physicians’ attendance at events sponsored by the Society of Lateral Access Surgery (SOLAS). According to case documents, SOLAS was created, funded, and operated solely by NuVasive, despite its appearance of being an independent third party. The company settled the case by paying $13.5 million to the federal government.

In response to this whistleblower lawsuit, the U.S. Attorney for the District of Maryland, Rod J. Rosenstein said, “Health care providers need to be free to make medical decisions without improper influence by material or incentives from manufacturers. A medical device manufacturer violates the law if it knowingly causes physicians to use its products for purposes that are not medically reasonable and necessary and to bill federal health insurance programs.”

False Claims Involving Off-Label Use and Kickbacks are a National Problem

False claims made by medical device and pharmaceutical companies are a serious national problem. First, these claims can involve adverse effects or useless treatments. In addition, they often cost the patient and the public at large amount of money. For example, in the NuVasive case, federal government programs such as Medicare and Medicaid were improperly billed and paid out millions of dollars for “off-label” treatments involving the CoRuent System, which was designed to treat minor conditions affecting certain sections of the spine. The government case alleged that instead the company marketed the system for severe deformities of the spine, including scoliosis, for which it had not been approved.

When a company promotes a product for off-label use, specifically where such use is unapproved, its benefits unproven, and it is being promoted by Big Pharma to enhance sales and increase profits, it can be both immoral and illegal. That’s where the False Claims Act can be useful. Under the False Claims Act, these companies can be investigated for fraud by the Department of Justice and held accountable if such fraud is substantiated.

As Special Agent Nick DiGuilio of the U.S. Department of Health and Human Services, Office of the Inspector General said, “Defrauding Medicare and Medicaid by paying kickbacks to physicians and promoting uses not covered by federal health care programs will not be tolerated. Settlements such as the one entered into today by NuVasive send a message to the medical device industry that such practices will be closely monitored.”

While Waters & Kraus is not handling this particular False Claims Act case, we are representing whistleblowers in similar lawsuits. If you have comparable claims against a different pharmaceutical or medical device company, contact us or call our qui tam attorneys at 800.226.9880 to learn more about our practice and how we can work together to notify the government about fraudulent abuses of government-funded programs.

This article was contributed by Anne Izzo one of the qui tam attorneys in the firm’s Dallas office.