Stryker Corporation’s OtisMed Unit has paid more than $80 million to settle a criminal and civil Department of Justice investigation which was started by a whistleblower under the False Claims Act. According to the complaint, OtisMed was selling devices used to help surgeons guide knee replacement components during knee surgery even though it had no FDA approval to do so.
The company admitted it never obtained U.S. Food and Drug Administration approval to sell 18,000 custom-built devices used by surgeons from 2006 to 2009 to make accurate bone cuts to implant prosthetic knees.
OtisMed applied for FDA approval in October 2008, and the agency said 13 months later the company hadn’t shown it was safe and effective. The company then shipped 218 devices to surgeons, overruling his advisers and board.