Bradley Partner Jason Mehta Quoted in Medtech Insight on Device Manufacturer’s Settlement in False Claims Act

Bradley attorney Jason Mehta was quoted in Medtech Insight on a multimillion-dollar settlement by a device manufacturer held responsible for false claims filed due to faulty test results. Alere Inc. agreed to pay $33.2 million to settle allegations that the company violated the False Claims Act by knowingly selling unreliable diagnostic testing devices that were then billed to federal healthcare programs. The settlement helps to highlight the U.S. government's growing enforcement focus on diagnostics companies.

Mehta, a former assistant U.S. Attorney, said he saw a few diagnostics settlements as a prosecutor, but the Alere settlement is "somewhat novel" because it's one of the first times DoJ has held a company responsible for false claims filed due to faulty test results. He believes this is tied to an increased DoJ focus on clinical diagnostics in general.

"A lot of that is driven in large part by the increasingly large share of federal money that is spent on clinical diagnostic testing," Mehta said.

Mehta also commented on the fact that the whistleblower's complaint and resulting DoJ action followed an FDA-led recall of Triage units. Typically, he said, DoJ doesn't move against companies that have already recalled the product in question. But he suspects the penalty may have been driven by slow or lacking corrective actions on Alere's part. "What the allegations suggest is that Alere was put on notice well before FDA issued a mandatory nationwide recall, and that makes this case somewhat qualitatively different from other recall cases."

The key lesson for other manufacturers, Mehta said, is to pay attention to and perform root cause analyses on customer complaints, especially if they're aggregated in large numbers and focused on a specific device feature.

"This settlement really illustrates that an ounce of prevention is worth a pound of cure," he said. Similarly, he encourages companies to limit their risk of FCA allegations by voluntarily self-disclosing known device issues to the government.

The complete article, “Alere’s $33.2m Settlement May Reflect Growing US Fed Focus On Dx,” appeared in the Medtech Insight on March 26, 2018.