Companies Settle Allegations They Marketed Medical Devices for Unapproved Pediatric Use

  • California AG Xavier Becerra reached settlements with medical device company Medical Device Business Services, Inc., a subsidiary of Johnson & Johnson (“MDBS”), and private equity firm The Gores Group (“Gores”) to resolve allegations that the two companies used improper marketing practices and submitted false claims to state Medicaid programs.
  • According to the AG’s office, the complaint, which stems from a whistleblower suit, alleged that MDBS and Gores improperly marketed prescription medical device systems for the treatment of skin problems associated with cutaneous T-cell lymphoma to pediatric patients, even though the systems were not approved by U.S. Food and Drug Administration for pediatric use. The systems were developed by Therakos Inc., a company which MDBS and Gores each owned at separate times.
  • Under the terms of the settlements with MBS and Gores, MDBS will pay over $73,000 and Gores will pay nearly $61,000 to the state. These settlements are part of global settlements into which the companies entered with all 50 states and the S. Department of Justice, under which MDBS agreed to pay $10 million and Gores agreed to pay $1.5 million to settle allegations under federal and state false claims acts.