Regulatory Focus™ > News Articles > Medical Device Manufacturer Pleads Guilty to Misbranding and Agrees to Pay $36M

Medical Device Manufacturer Pleads Guilty to Misbranding and Agrees to Pay $36M

Posted 11 November 2016 | By Zachary Brennan 

Medical Device Manufacturer Pleads Guilty to Misbranding and Agrees to Pay $36M

Pennsylvania-based medical device manufacturer Biocompatibles Inc., a BTG subsidiary, pleaded guilty earlier this week to misbranding its embolic device used to treat liver cancer, among other diseases, and will pay more than $36 million due its illegal conduct, the Justice Department (DOJ) said. 

Under the terms of the plea agreement before the US District Court for the District of Columbia, Biocompatibles pleaded guilty to a misdemeanor charge in connection with the company’s misbranding of the device, known as LC Bead, in violation of the Federal Food, Drug and Cosmetic Act

LC Bead was initially approved by the US Food and Drug Administration (FDA) as an embolization device that can be placed in blood vessels to block or reduce blood flow to certain types of tumors and arteriovenous malformations, but the device has never been cleared as a drug-device combination product or for use as a drug-delivery device or “drug-eluting” bead.

Biocompatibles will pay an $8.75 million criminal fine for the misbranding of LC Bead and a criminal forfeiture of $2.25 million. In addition, the company will pay $25 million to resolve civil allegations under the False ClaimsAct that the company caused false claims to be submitted to government healthcare programs for procedures in which LC Bead was loaded with chemotherapy drugs and used as a drug-delivery device. 

How it Played Out

Back in 2004, FDA sought assurances that Biocompatibles would not market the device for drug delivery, and the company told FDA that “under no circumstance” would it use the embolization clearance to market the device for drug delivery. 

However, two years later, Biocompatibles began marketing LC Bead for drug delivery through a company it hired for sales and distribution in the US. 

The distribution company, according to the DOJ, told its sales representatives that LC Bead was “[a] drug-delivery device” and trained its sales representatives to “aggressively penetrate the chemoembolization market.”  Sales representatives subsequently told health care providers that the device increased the level of chemotherapy delivered to a liver tumor and resulted in “better tumor response rates,” despite the lack of FDA clearance or approval for that use and despite the absence of statistically significant evidence to support such claims.

In December 2009, Biocompatibles filed an application with FDA for approval of LC Bead as a drug-eluting bead combination product but FDA refused to accept the application because clinical studies did not provide adequate evidence of a therapeutic benefit. 

Nonetheless, according to the DOJ, Biocompatibles’ distributor routinely advised health providers that the device provided “better” or “superior” therapy for certain types of cancer,  without sufficient clinical evidence to support the claims.

US Attorney Richard Durbin Jr. of the Western District of Texas said in a statement: “The FDA approval process and clinical studies serve to ensure that patients receive devices that meet those standards. We will vigorously pursue those who ignore or seek to circumvent these important patient protections.”

BTG said in a statement in early October that the investigation focused on the period pre-dating its acquisition of Biocompatibles in January 2011.

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