Stryker Settles Claims it Violated Patient Safety Laws

Stryker Corp. has agreed to pay $1.35 million to settle claims that it marketed orthopedic devices without regulatory approval and misled healthcare providers about the use of its products, the Massachusetts Attorney General’s Office announced.

A “multi-year” investigation by prosecutors found that Stryker Biotech LLC violated the state’s Consumer Protection Act by engaging in unfair and deceptive trade practices that boosted sales of products used promote to bone growth. Last fall, a federal grand jury indicted the biotech unit and former president Mark Philip for misleading the U.S. Food and Drug Administration (FDA) about the use of bone-growth products. Philip, president of Stryker Biotech from 2004 to 2008, and three sales managers allegedly promoted the products in a manner that was not intended for their approved use. The four pleaded not guilty, according to the case docket.

“Stryker Biotech subverted review procedures designed to safeguard patients and promoted uses of its products that were not shown to be safe or effective,” Attorney General Martha Coakley said in a statement. “Our office will vigorously pursue any allegations that health care companies are compromising patient safety in pursuit of profits.”

The attorney general’s investigation focused on the marketing of OP-1 Implant and OP-1 Putty, which are designed to promote bone growth and are used to treat conditions involving weak bones. With limited approval from the FDA, the products only could be used with patients after they were okayed by a hospital’s Institutional Review Board.

Coakley said Stryker falsified documents from Massachusetts hospitals’ Institutional Review Boards to get permission to use the bone growth products and withheld information from healthcare professionals about the restrictions. A complaint filed in state court in Boston last week also accuses the Kalamazoo, Mich.-based firmpromoted the use of two of its products together, a treatment that had not been studied or approved by the FDA. The company did not stop marketing the product combination even after reports of adverse events in patients, according to the complaint.

As part of the settlement, Stryker will not admit any liability, the company said.

Under the settlement, Stryker will pay $325,000 in civil penalties, $875,000 to fund efforts to combat unlawful marketing and other programs to benefit healthcare consumers, and $150,000 to cover attorneys’ fees and investigative costs. Last year, the company reported revenue of $6.72 billion.