On April 14, 2009, Shane Doyle, who worked as a territory manager for Stryker Biotech (a publicly traded medical device company based in Hopkinton, Massachusetts), pled guilty before U.S. District Judge Woodlock in Boston, Massachusetts to one count of felony misbranding. The medical device at issue, OP-1 (Osteogenic Protein -1), is designed to promote bone growth and was approved by the FDA only pursuant to a Humanitarian Device Exemption (“HDE”), which is quite narrow and restrictive. It is approved in 28 other countries however.
At the plea hearing, the prosecutor told the Court that had the case proceeded to trial the Government’s evidence would have proven that Mr. Doyle, in his capacity as a territory manager for his employer, promoted the use of these devices in a manner that was different from its FDA approved use. Specifically, he promoted a combination of the HDE devices with a bone void filler, and in furtherance of that promotion provided mixing instructions to surgeons, medical technicians and others.
Sentencing is set for July 23, 2009, and Doyle faces up to 3 years imprisonment, to be followed by 1 year of supervised release and a $250,000 fine.
Attorney Comment: This is the third Stryker sales representative to have entered a guilty plea. On March 6, 2009, the U.S. Attorney's Office sent Stryker a letter that they are the target of a federal grand jury investigation for the alleged illegal promotion of OP-1 and Calstrux. The question will be how high up does this go? Sometimes corporations plea rather than individuals and here it looks like they're working from the bottom up.
Prior to this criminal investigation and guilty pleas from sales representatives, Stryker had received a "No" recommendation for approval from the FDA Ortho Panel and FDA warning letters for their plant in Massachusetts. For a product that had not been approved by the FDA, the sales representatives and company put a lot on the line and took a lot of risks.
For those who are working for corporations, this case is a reminder not to put short-term sales ahead of one's career or liberty. With one of these felony convictions, apart from the risk of prison time, one collateral consequence for the Stryker sales reps will be OIG exclusion from most health care related jobs for 5 years. Seek independent counsel if your 6th sense tells you that corporate policies are violating the law. For businesses and individuals, compliance is the key. Stryker is a large orthopedics company and the fact that even it can come under criminal investigation should be a sign as to how aggressive the government can and will be in health care cases -- especially where FDA non-approved devices or products are at issue.
Any questions or comments should be directed to: tgreen@greenassoc.com. Tracy Green is a principal at Green and Associates in Los Angeles, California. They focus their practice on the representation of licensed professionals and businesses in civil, business, administrative and criminal proceedings, with a specialty in health care providers.
