Synthes, Norian Plead Guilty, Will Pay $23.3M For Illegal Bone Cement Study

Synthes, Norian Plead Guilty, Will Pay $23.3M For Illegal Bone Cement Study

PHILADELPHIA - (Mealey's) Synthes Inc. and subsidiary Norian Corp. have agreed to plead guilty to federal felony and misdemeanor counts of conducting illegal clinical studies of bone cement and will pay $23.3 million in fines, forfeiture and a civil settlement, the U.S. Attorney's Office for the Eastern District of Pennsylvania announced Oct. 4 (United States of America v. Norian Corporation, et al., No.; 09-403, E.D. Pa.).

In a superseding information filed Oct. 4 in the U.S. District Court for the Eastern District of Pennsylvania, Norian is charged with one felony count of conspiracy to impair and impede the Food and Drug Administration and 110 misdemeanor counts of shipping adulterated and misbranded Norian XR bone cement.  Synthes is charged with one misdemeanor count of shipping adulterated and misbranded Norian XR.

The U.S. Attorney's Office said the two companies agreed to plead guilty, and the government on Oct. 4 filed a guilty plea and sentencing memorandum.

Norian will pay a fine of $22.5 million, forfeit $469,800, pay a special assessment of $14,150 and be on five years' probation.  Synthes will pay a maximum fine of $200,000 and forfeit $469,800.

Norian will also be excluded from participation in federal health care programs such as Medicare.  Synthes agreed to divest itself of Norian's assets.

In addition, Synthes and Norian agreed to pay $138,000 to settle False Claims Act allegations for causing false claims to be submitted to the federal government.

The United States alleges that from May 2002 to the fall of 2004, the company conspired to market Norian XR and Norian SRS for off-label treatment of vertebral compression fractures (VCFs) of the spine.  It did so by conducting a "test market" in which it bypassed getting FDA permission to conduct clinical studies of the new use and instead recruited spine surgeons to use the cement for VCFs and to train other surgeons in that use.

The government says that after three patients died of blood clots, the defendants cancelled the test market then made false and misleading statements to the FDA when the agency began an investigation.

Four former Synthes executives previously pleaded guilty to separate charges related to the bone cement and await sentencing.

[Editor's Note:  Full coverage will be in the Oct. 7 issue.  In the meantime, the documents are available at www.mealeysonline.com or by calling the Customer Support Department at 1-800-833-9844.  Superseding information.  Document #28-101007-056F.  Settlement agreement.  Document #28-101007-057P.  Divestiture agreement.  Document #28-101007-058X.  Corporate integrity agreement.  Document #28-101007-059X.  Plea and sentencing memorandum.  Document #28-101007-060B.  For all of your legal news needs, please visit www.lexisnexis.com/mealeys.]

For more information, call editor Tom Moylan at 610-205-1120, or e-mail him at tom.moylan@lexisnexis.com.