J&J subsidiary to pay $9.75M to resolve kickback allegations

Jan 20, 2023, 2:57 PM | Updated: 3:12 pm
FILE - The Johnson & Johnson logo appears above a trading post on the floor of the New York Stock E...

FILE - The Johnson & Johnson logo appears above a trading post on the floor of the New York Stock Exchange on July 12, 2021, in New York. A subsidiary of the health care company has agreed to pay nearly $10 million to settle allegations that it violated federal and state law by providing free products to a surgeon to induce him to use its products in procedures, prosecutors said Friday, Jan. 20, 2023. "We have fully cooperated with the government throughout its investigation of the allegations and were credited for that cooperation in the settlement," Johnson & Johnson said in a statement. (AP Photo/Richard Drew, File)

(AP Photo/Richard Drew, File)

BOSTON (AP) — A subsidiary of health care company Johnson & Johnson has agreed to pay nearly $10 million to settle allegations that it violated federal and state law by providing free products to a surgeon to induce him to use its products in procedures, prosecutors said Friday.

Under the settlement with DePuy Synthes, the company acknowledges and accepts responsibility for giving the surgeon implants and instruments for spinal surgeries from 2013 though 2018, federal prosecutors said.

“We have fully cooperated with the government throughout its investigation of the allegations and were credited for that cooperation in the settlement,” Johnson & Johnson said in a statement. “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, headquartered in Raynham, Massachusetts, manufactures and distributes medical devices including spinal implants.

The surgeon, whose name was redacted in the agreement, performed more than 20 operations over the course of multiple trips to Bahrain, Saudi Arabia, Kuwait, Lebanon, the United Arab Emirates and Qatar, during which he used about $100,000 worth of DePuy products that company sales representatives had provided to him.

The surgeon and the hospitals in which the procedures were performed did not pay for the products.

Prosecutors said DePuy provided them to induce the surgeon to use the company’s products in spine surgeries performed on Medicare and Medicaid patients in Massachusetts in violation of the Anti-Kickback Statute, which is intended to ensure that medical providers’ judgments are are based on the best interests of patients and not compromised by improper financial incentives.

“Unlawful kickbacks can severely distort medical judgment as well as the market for medical devices,” U.S. Attorney for Massachusetts Rachael Rollins said in a statement. “The millions of patients that depend on our health care system deserve untainted medical decisions.”

About $7.2 million of the $9.75 million settlement will go to the federal government, and about $2.5 million to the state. More than $1.8 million of the federal portion will go to the whistleblower who brought the original suit in 2017 under a legal provision that lets private parties sue on behalf of the government and share in any recovery.

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J&J subsidiary to pay $9.75M to resolve kickback allegations