The former chief executive officer (CEO) for medical device maker OtisMed was sentenced Friday to 24 months in prison for introducing adulterated medical devices into interstate commerce, specifically OtisKnee cutting guides.
Following his two years behind bars, former OtisMed CEO Charlie Chi must serve one year of supervised release and pay a $75,000 fine. The punishment was handed down by the U.S. District Court of New Jersey, according to Imperial Valley News (IVN).
In December, OtisMed agreed to pay more than $800 million to resolve criminal and civil liability charges related to the distribution of adulterated medical devices with intent to defraud and mislead. Chi pleaded guilty to introducing adulterated medical devices into interstate commerce. The charges were the culmination of a joint investigation conducted by special agents from the U.S. Food and Drug Administration’s (FDA) Office of Criminal Investigation and from the U.S. Department of Health and Human Services’ Office of the Inspector General, IVN reported.
“With more than 600,000 knee replacements performed each year, patients rely on FDA to help ensure that the devices are safe and work as intended. When manufacturers ignore FDA requirements, they risk endangering patients’ health and quality of life,” George M. Karavetsos, director of the FDA’s Office of Criminal Investigations, told IVN. “We will continue to protect the public health by bringing to justice those who disregard FDA regulations.”
The OtisKnee cutting guide is a tool designed to assist surgeons in making accurate bone cuts specific to individual patients’ anatomy based on magnetic resonance imaging (MRI) prior to the operation. OtisMed made claims concerning the product’s safety and effectiveness in advertisements and promotional materials without the FDA’s prior evaluation, according to IVN.
More than 18,000 OtisKNee cutting guides were sold between May 2006 and September 2009, generating approximately $27.1 million for OtisMed. On October 2, 2008, the company submitted a pre-market notification to the FDA, seeking clearance to market the device, which the firm was supposed to have done before it started selling the product; however, OtisMed had been marketing the device to physicians and other potential buyers under the premise that the OtisKnee was exempt from such pre-market requirements, IVN reported.
On September 2, 2009, the FDA sent OtisMed a notice stating that its submission had been denied. According to the notification obtained by IVN, the FDA said the company had failed to demonstrate the OtisKNee was as safe and effective as other legally marketed devices. One week later, OtisMed shipped about 218 of the guides from California to surgeons throughout the U.S.
“The defendant betrayed the trust of patients whose doctors were using his unapproved surgical device for a serious medical procedure,” a U.S. Attorney for the District of New Jersey told IVN. “With everything else people have to deal with when they are facing surgery, they shouldn’t have to worry whether their doctor is using equipment that has been approved for use. The punishment meted out to Chi and his company is appropriate.”
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from Parker Waichman http://www.yourlawyer.com/blog/u-s-district-court-sentences-former-otismed-ceo-to-prison-over-charges-related-to-the-otisknee-cutting-guide-device/
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