The U.S. Department of Justice on Monday revealed a $38.5 million settlement resolving accusations that a subsidiary of German medical device titan B. Braun Melsungen AG sold a knee implant it allegedly knew was prone to early failure — a product that prosecutors say ultimately triggered false claims submitted to Medicare and Medicaid.
Deal Ends Allegations Over VEGA System Knee Implant
B. Braun’s subsidiary Aesculap Implant Systems agreed to the multimillion-dollar payout to close out the government’s claims tied to its VEGA System knee replacement device. The settlement arrives roughly one year after Aesculap halted U.S. sales of the implant and its related product line.
The DOJ also entered into a nonprosecution agreement, declining to criminally charge Aesculap over the sale of two medical devices allegedly marketed without FDA clearance — an issue tied to a former employee who forged federal authorization documents.
“Devices Must Not Mislead,” Prosecutor Says
“A company that knows its product has a propensity to prematurely fail must not mislead doctors or government regulators,” U.S. Attorney David Metcalf of the Eastern District of Pennsylvania said Monday. “Federal programs should not be forced to pay for devices that carry undue risk and may require painful, expensive corrective surgeries.”
B. Braun attorney Christiana Jacxsens, serving as corporate vice president and general counsel for its U.S. life sciences arm, welcomed the agreement, calling it a long-overdue closure to “these longstanding matters.”
