C.R. Bard to pay $48.3 million to settle kickback case

Medical-device maker C.R. Bard Inc. agreed to pay $48.3 million to resolve allegations that the company illegally rewarded physicians and other customers for using its radiation seeds in the treatment of prostate cancer.

From 1998 to 2006, according to the U.S. Justice Department, Bard paid kickbacks in the form of grants, rebates, conference fees, marketing assistance and free medical equipment to induce customers to buy its brachytherapy seeds. In addition to the settlement payment, the agreement calls for Bard to enter a five-year corporate integrity agreement with HHS' inspector general's office.

“This resolution allows the company to put this matter behind it and continue to focus on delivering life-enhancing medical devices and technologies to patients around the world,” Bard said in a written statement.

The government's lawsuit stems from a whistle-blower complaint filed by Julie Darity, a former contracts administration officer for the company in Georgia. Darity is in line to receive a $10.1 million cut from the settlement.

Bard reported nearly $3 billion in sales in 2012, yielding net income of $530 million. The company's urology division, which includes brachytherapy products, accounted for 26% of consolidated sales in 2012, according to results filed with the Securities and Exchange Commission. Sales of brachytherapy products declined 15% compared with 2011, which the company attributed to the procedure losing market share to alternative therapies.

The company announced a preliminary agreement on the matter with the U.S. attorney's office in Georgia in January 2012.