Howard Root, CEO, Vascular Solutions
Howard Root is one ticked-off medtech CEO.
The head of Vascular Solutions in Maple Grove, Minnesota, and his company were found not guilty in February on 10 criminal counts alleging off-label use of a medical device.
Root warned the audience at the annual AdvaMed conference in Minneapolis, Wednesday, that the federal government could target them next.
The company and Root went on trial five years after Root maintains that a disgruntled employee filed a whistleblower lawsuit alleging illegal promotion of a device to treat varicose veins. Doctors are free to use medical devices to treat any condition, even other than for which the device has regulatory clearance or approval. But companies are not allowed to promote the use of devices for those off-label indications.
While the U.S. Department of Justice was investigating Root and his company, a memo was released in September 2015 outlining a shift in DOJ policy toward corporate defendants.
“While this shift in policy appears to be a response to repeated criticism that too many individuals evaded punishment for wrongdoing related to the financial crisis and a related push to improve integrity within the banking sector, it will have significant implications for healthcare providers and their employees,” wrote Austin, Texas, attorney Catherine Greaves for the American Bar Association’s health law section.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
Root believes that the memo could be the rationale for other executives feeling more heat from the DOJ. He pointed to recent cases in which healthcare executives faced criminal prosecution based on their companies’ alleged actions. One such involved Carl Reichel, who was president of Warner Chilcott’s pharmaceuticals division from 2009 to 2011 before Allergan acquired the company in 2013.The DOJ statement announcing Reichel’s October 2015 arrest said the “enforcement actions demonstrate that the government will seek not only to hold companies accountable, but will identify and charge corporate officials responsible for the fraud.”
Ultimately, however, Reichel was found not guilty in June 2016 of charges that he told a sales team to offer doctors free meals and speaker fees to persuade them to prescribe the company’s drugs. But Warner Chilcott agreed to plead guilty to a criminal charge of healthcare fraud in the case and paid $125 million to settle allegations that it violated the False Claims Act and to resolve criminal liability.
A federal jury in Massachusetts acquitted former Acclarent executives William Facteau and Patrick Fabian in July 2016 of 14 felony charges alleging off-label use of medical devices, while convicting them following a six-week trial on 10 counts of introducing adulterated and misbranded medical devices into interstate commerce. The convictions on these misdemeanor charges could land them in prison.
Despite the merits or demerits of each individual case, Root seemed to allege a DOJ penchant, at best, or a conspiracy, at worst, to pursue executives they believe have committed wrong.
“This is a group of people who are out to get all of us,” Root said at AdvaMed. “They consider us to be evil, devil-people within society today.”
Photo: Vascular Solutions
