Medical-device manufacturer Medtronic and several affiliates have paid $4.4 million to settle allegations that they sold products to the U.S. government that were made in China and Malaysia in violation of federal law.
The manufacturer did not admit to any illegal or improper activities as part of the settlement, which Medtronic said Thursday came out of an investigation that began in 2012.
“This resolution focused on a limited number of accessories and surgical instruments used in spinal surgeries that were provided to Medtronic by third-party suppliers and were manufactured in China or Malaysia,” according to a statement released by Medtronic Thursday. “The overwhelming majority of Medtronic's products are manufactured in the United States or [by] its trading partners, such as Mexico or Ireland.”
The government alleged that Medtronic, along with affiliated companies Medtronic Inc., Medtronic USA Inc., and Medtronic Sofamor Danek USA Inc., sold products to the U.S. Veterans Affairs Department and the Department of Defense that were made in China and Malaysia after certifying they were made in the U.S. or other designated countries.
The Trade Agreements Act of 1979 generally requires companies that sell products to the government to manufacture them in the U.S. or another designated country, according to the Department of Justice.
The government alleged Medtronic violated the False Claims Act by making false statements to the government about the products' countries of origin.
The products, allegedly sold between 2007 and 2014, included anchoring sleeves used to secure cardiac leads to patients, spinal surgery devices, and a handheld patient assistant tool used with a wireless cardiac device.
Three whistle-blowers filed a lawsuit making the original allegations. Under the False Claims Act, whistle-blowers are entitled to a percentage of whatever the government is able to recover in such cases. In this case, the whistle-blowers will get $749,700.
