AngioDynamics, Inc. has agreed to pay the Federal government and various states $11.5 million to settle a False Claims Act whistleblower lawsuit alleging that the medical device company based in Latham, New York allegedly sold its device, Gelspheres, as a drug eluting device when the FDA had cleared it only for embolization (blood blockage) of hypervascular tumors. The case stemmed from an action filed by whistleblower Ryan Bliss, former Senior Product Manager responsible for marketing for BTG plc and its subsidiary Biocompatibles Inc., manufacturer of the Gelspheres.

The government alleged that, from May 2006 and December 2011, AngioDynamics served as the U.S. distributor for Biocompatibles plc, the manufacturer of LC Bead, and marketed LC Bead for use as a drug-delivery device in combination with chemotherapy drugs, specifically in a medical procedure known as drug-eluting bead transarterial chemoembolization, or “DEB-TACE”. According to the allegations of the case, AngioDynamics personnel routinely claimed that the use of the LC Bead was “better”, “superior”, “safer” and “less toxic” than alternative treatments. Not only was there insufficient clinical evidence to support the truthfulness of these claims, but the FDA explicitly declined to approve this particular use – twice. AngioDynamics was also accused of instructing healthcare providers to use inaccurate billing codes when submitting claims for these uses, knowing that many insurers decline to provide coverage for certain LC Bead procedures.

“When manufacturers make misleading statements concerning the use of their products in ways that have not been cleared by the FDA, it undermines patient care. Taxpayers and patients deserve better”, said Acting Assistant Attorney General Chad A. Readler for the Justice Department’s Civil Division, in a press release issued by the Justice Department.

Unscrupulous healthcare providers have found many different ways to take advantage of vital government programs like Medicare. The False Claims Act has been an important tool in the fight against government programs fraud since it was first enacted to combat war profiteering during the Civil War. But the system depends on healthcare whistleblowers telling their story with the help of an experienced False Claims Act attorney. As a part of this case’s resolution, Mr. Ryan Bliss will receive approximately $2.3 million reward under a provision of the False Claims act that permits successful qui tam whistleblowers to receive between 15% and 30% of the amount recovered for the government

“The basic legal rule in this area could be mastered by a third-grader:  Don’t lie,” said U.S. Attorney John F. Bash for the Western District of Texas, in the Justice Department’s press release.  “If you do, you will be held accountable.  This settlement reflects that.”