DOJ Indicts Stryker Biotech On Charge Of Fraud

Greg Webb

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The Justice Department has reported that Stryker Biotech LLC, the medical device manufacturing division of Stryker Corp., and its top management have been indicted on federal charges of fraud due to a marketing scheme for bone-growth products OP-1 implant and OP-1 putty. These two products were promoted for use in a manner different from the use approved by the Food and Drug Administration (FDA). Although Stryker did have a federal exemption that authorized it to sell the products for "humanitarian" reasons to treat a rare condition, it instead promoted a combination of the devices with a bone void filler called Calstrux and provided "recipes" on how to combine Calstrux with OP-1 in ways never approved by the FDA.

The indictment charged Stryker Biotech, its former president, and three current sales managers with a scheme that involved devices used during invasive long bone and spinal surgeries; the former president and the company were also charged with making false statement to the FDA. If the company is convicted, it could face serious fines and possible exclusion from participating in federal and state healthcare programs. The former president and the three sales managers could also face jail time if convicted of wire fraud conspiracy and misbranding charges.

Because of the potentially negative ramifications of a conviction, Stryker is expected to aggressively pursue a settlement.