OtisMed Corporation (OtisMed) and its former chief executive officer (CEO) recently pleaded guilty to intentionally distributing knee replacement surgery cutting guides after the Food and Drug Administration (FDA) had rejected their application for marketing clearance. Specifically, the U.S. District Judge Claire C. Cecchi charged OtisMed with violating the Food, Drug, and Cosmetic Act by distributing adulterated medical devices into interstate commerce with the intent to defraud and mislead.
Judge Cecchi sentenced OtisMed to $34.4 million and ordered $5.16 million in criminal forfeiture. OtisMed also agreed to pay $40 million plus interest to resolve its civil liability in a separate civil settlement. The CEO pleaded guilty before a U.S. Magistrate Judge to three counts of introducing adulterated medical devices in interstate commerce, and will be sentenced on March 18, 2015. Further, OtisMed agreed to be excluded from participating in all federal health care programs for 20 years. Stryker, OtisMed’s parent corporation, separately agreed to several compliance measures to prevent future misconduct.
The DOJ justice news is available at:
Department of Justice. “OtisMed Corporation and Former CEO Plead Guilty to Distributing FDA-Rejected Cutting Guides for Knee Replacement Surgeries.” Justice News. 08 Dec. 2014.