A medical device company and its CEO were charged Thursday with selling products designed to treat varicose veins without Food and Drug Administration approval, and then trying to illegally hide those sales from the government, the U.S. Justice Department announced.
A federal grand jury in San Antonio indicted Vascular Solutions and its CEO Howard Root on charges of conspiracy and introducing adulterated and misbranded medical devices into interstate commerce. According to the indictment, the company's Vari-Lase products were sold for the removal of perforator veins, which connect superficial veins to deep veins, even though the devices had only been approved by the FDA for superficial vein treatment. The Vari-Lase system treats varicose veins by burning or “ablating” them with laser energy.
The company released a statement Thursday calling the allegations “false” and promising to contest them vigorously.
“The indictment is the profoundly flawed product of government attorneys who have conducted a misguided and abusive investigation,” Vascular said in the statement. “Without the company being able to present any information to the grand jury, today's action is not surprising. It is, however, fundamentally wrong and profoundly unjust.”
The company's statement goes on to say that sales of its now-discontinued Short Kit to treat varicose veins were $534,000, representing 0.1% of its total U.S. sales for the seven years the kit was on the U.S. market between 2007 and 2014.
“The discrepancy between the insignificance of our Short Kit product and the severity of the government's actions in this matter is simply astonishing,” the company said. “The reason for that discrepancy will become readily apparent when the government attorney's stated motives and abusive conduct in this investigation are disclosed in our upcoming court filings.”
The company's chairman of the board, John Erb, also said in the statement that Root will continue to lead the company “throughout this legal process and to its successful resolution at trial.”
The government contends that treating perforator veins with lasers can be difficult and risky because they come into direct contact with deep veins.
Root is charged with leading the illegal sales campaign and conspiring with others to keep it a secret from the FDA. The indictment alleges that Root authorized the campaign after the company failed to get FDA approval to sell its Vari-Lase system for the treatment of perforator veins.
The indictment also alleges Vascular and Root deceived the FDA by launching the Short Kit to treat perforator veins, despite its lack of FDA marketing authorization, by claiming the product was for treatment of “short veins.” Root allegedly taught the company's salespeople that the term “short veins” included perforator veins and encouraged them to suggest to doctors that the devices could be used to treat perforator veins.
Vascular already settled with the government earlier this year in a related civil case, agreeing to pay $520,000, also over allegations involving the use of its Vari-Lase devices for treatment of perforator veins. At that time, the government alleged that the company knowingly caused doctors and others who bought the Short Kit to submit false claims to federal healthcare programs for uses of the Short Kit that were not reimbursable. The company admitted no wrongdoing in that settlement. That case was brought by a whistle-blower.
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