Mesh Medical Device News Desk, July 25, 2016 ~ Whistleblower Wants J&J Subsidiary Execs To Be Imprisoned Following $18 Million Fine and Federal Conviction
Melayna Lokosky is not shy.
The former Acclarent Inc. medical device sales rep worked for a Johnson & Johnson subsidiary until 2011 when she filed a whistleblower lawsuit against the company. Lokosky alleged Acclarent executives were aggressively marketing a medical device for uses not approved by the U.S. Food and Drug Administration (FDA).
When she didn’t play ball, she lost her job and created the appropriately named Facebook page, Killing My Career.
Last week, after a six-week trial, the two executives were convicted of 10 misdemeanor counts and the misdeeds cost Acclarent $18 million. Lokosky, the whistleblower, will receive $3.5 million for her role in bringing the actions to light.
But she wants more. She believes prison time is more fitting for these two.
Last Friday, the seal was lifted on the case and now Lokosky can speak about it.
The Department of Justice revealed Acclarent will pay the government $18 million to settle the whistleblower lawsuit also known as a False Claims Act.
“The FDA approval process serves an important role in ensuring that federal health care participants receive devices that are safe, effective and medically appropriate,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “We will not permit companies to circumvent that process and put profits over patient safety.”
Executives William Facteau, 47, Acclarent’s former CEO, and VP of Sales, Pat Fabian, were convicted by a federal jury in Boston July 20th of distributing adulterated and misbranded medical devices into interstate commerce.
The company made the RElieva Stratus Microflow Spacer, also known as Stratus to be used with saline solution to maintain sinus openings after surgery.
Instead, Acclarent marketed Stratus as a drug delivery device for corticosteroids even after the FDA in 2007 rejected the company’s request to include that in approved uses. Acclarent even made a video demonstrating Stratus being used with the drug Kenalog-40, a corticosteroid.
Health care providers who submitted claims to Medicare and other federal health programs for that use, then did so falsely.
The jury agreed the two men marketed the Stratus for use as a steroid delivery device.
The 10 misdemeanors are a violation of the Food, Drug and Cosmetic Act carry a year in prison for each count.
Lokosky believes the executives held responsible should be held accountable and has started a Change.org petition calling for the stiffest penalties allowed under law.
“If you were injured by a medical device then you'll want to pay attention to this story. Don't miss your opportunity to weigh in on sending convicted white collar medical device executives to jail. Especially if your injury stems from a company first funded by NEA - New Enterprise Associates (like Gynecare or Essure because they also funded Acclarent."
“We cannot allow the courts to encourage, replicate and reward unethical and illegal behavior that a jury of peers already CONVICTED on, by going soft on medical device executives during their sentencing.”
The case is unusual for holding accountable executives of a major corporation rather than just imposing civil fines.
Last fall, U.S. Deputy Attorney General Sally Yates issued a memo published by Stat. It states the trend toward charging based on individual accountability for corporate wrongdoing.
“One of the most effective ways to combat corporate misconduct is by seeking accountability from the individuals who perpetrated the wrongdoing. Such accountability is important for several reasons: it deters future illegal activity, it incentivizes changes in corporate behavior, it ensures that the proper parties are held responsible for their actions, and it promotes the public's confidence in our justice system.”
The lawsuit was filed under the Health Care Fraud Prevention and Enforcement Action Team, created by Health and Human Services in May 2009 to reduce and prevent financial fraud in Medicare and Medicaid. The False Claims Act allows whistleblowers to alert lawmakers to financial crimes. The DOJ has reportedly recovered more than $30 billion since January 2009.
Lokosky filed her whistleblower suit under the False Claims Act which allows private parties to sue for false claims on behalf of the government and share in a portion of the recovery. The civil lawsuit was filed in the District of Massachusetts United States ex rel. Melayna Lokosky v. Acclarent, Inc.
Stratus was taken off the market in May 2013 and marketing for the device was discontinued. It is no longer commercial available in the U.S., according to a DOJ statement.
Johnson & Johnson acquired Acclarent in 2010. The company says the alleged misconduct took place before the J&J purchase. Attorneys for Facteau & Fabian plan to appeal the misdemeanor convictions. ##