Life Science Compliance Update

April 20, 2018

The Escobar Hurdle – False Claims, Materiality, and Dismissal

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U.S. ex rel. Ruckh v. CMC II LLC et al. (“Ruckh”) was a closely followed False Claims Act case, because a Florida Federal Court opted to vacate a nearly $350 Million FCA verdict involving a nursing home operator. The case is significant because it demonstrates the ongoing impact of a party’s failure to meet the Escobar materiality standard.

For many months, we have followed the U.S. Supreme Court decision in case of Universal Health Services, Inc. v. United States ex rel. Escobar (“Escobar”). Back in August 2016, we noted that it appeared neither side won a decisive victory, but time would tell.

Starting with a case involving Genentech, we have seen the Escobar standards used to curtail false claims liability. Fast forward to 2018 and we can now say with some authority that Escobar and its progeny have created a significant hurdle restricting what up to now seemed to be the unlimited reach of the Federal False Claims Act (“FCA”) in the healthcare context. Most recently, the case of United States ex. rel. Ruckh v. CMC II LLC et al. in the U.S. District Court in Florida’s middle district involving a nursing home operator continues the trend.

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April 18, 2018

It’s Not All About the Money - Medtronic’s Infusion Multi-State Settlement Agreement

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In a closely watched matter culminating years of litigation, Medtronic on December 12, 2017, entered into a $12 Million multi-state settlement resolving allegations that the medical device company had misled consumers about the safety, efficacy, and effectiveness of its Infuse® Bone Graft Device (“Infuse”). The settlement represents continued coordination among States to prosecute marketing fraud and false advertising within the medical device industry.

Within both the U.S. medical device manufacturing arena as well as the life science compliance communities, few companies stand out like Medtronic Sofamor Danek, U.S.A, Inc. (“Medtronic”). Medtronic has long been considered a leader in ethics and compliance for medical devices. In fact, in 2017, AdvaMed awarded its coveted MedTech Ethical Leadership Award, which is sponsored by PwC, to Thomas Schumacher, Medtronic’s Chief Compliance Officer, for demonstrating “outstanding leadership in the advancement of ethics and ethical behavior in the medical device and diagnostics industry.”


However, Medtronic, a leading manufacturer of devices for use in spinal surgery, also has had its share of missteps with government authorities. In December 2017, Medtronic settled its most recent issue with multiple state attorneys general. This case is notable not for the size of the settlement ($12 million), but rather for the remedial actions Medtronic agreed to, as well as the proposition that even good companies, with robust compliance programs, can still have problems.

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April 17, 2018

Nicodemo (Nico) Fiorentino Joins Life Science Compliance Update as Associate Editor

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As Life Science Compliance Update enters its fourth year of publication, it is a great pleasure to announce that Nicodemo Fiorentino joins Thomas Sullivan, Publisher and Dr. Seth Whitelaw, Editor as a member of the Update’s editorial staff. 

“Nico brings an outstanding mix of passion, scholarship and pure writing ability that will only enhance quality of the publication,” said Sullivan.  “It is aligned with our goal to create a single resource that allows busy compliance professionals and business executives to read less but become more attuned.”

“It’s a sign that both the topics we cover and the Update itself are growing,” said Whitelaw. “We have so much going on every month that it is a challenge to get the critical information and insights out quickly enough.  Nico, will help us continue to bridge the knowledge gaps between the most experienced practitioners and those with less time in the profession.”

In addition to being a member of the Editorial Board and a frequent contributor on multiple topics, including drug pricing transparency, to the Update, Nicodemo Fiorentino, currently is a member of G&M Health LLC., which provides a wide range of services to the life science industry. A New Jersey native, he received his bachelor’s degree, with honors, in History from Rowan University, Glassboro, New Jersey and his Juris Doctor (J.D.) from Rutgers University School of Law, Camden, New Jersey.

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