#USA #FDA #Center Valley #AIS #Aesculap

Aesculap Implant Systems Successfully Resolves Long-Standing Federal Investigations

Aesculap Implant Systems, LLC (AIS), situated in Center Valley, Pennsylvania, has announced the resolution of federal investigations that date back over eight years. This announcement brings to a close significant matters that have been lingering for quite some time, thanks to two agreements with the United States Department of Justice (DOJ).

In 2017, AIS voluntarily disclosed the unauthorized distribution of two medical devices due to the fraudulent actions of a former employee. This individual's misconduct involved misrepresenting the FDA clearance status of the devices—a serious breach of protocol that AIS quickly addressed. Upon discovering this malpractice, the company took immediate action by notifying the FDA, terminating the employee, and initiating a recall of the affected devices. Further demonstrating their commitment to compliance, AIS also fully reimbursed all purchasers. Importantly, no patient injuries were reported as a result of these actions. The company has effectively been recognized as a victim of the fraud during legal proceedings.

In January 2024, the former employee pleaded guilty to a felony charge for violating the Federal Food, Drug, and Cosmetic Act. Consequently, they received a 12-month prison sentence along with a restitution order to compensate AIS for the damages incurred.

Although the distribution of medical devices lacking clearance amounts to a strict liability misdemeanor, the DOJ's Consumer Protection Branch decided not to pursue criminal charges against AIS. This decision was made contingent upon AIS’s compliance with a Non-Prosecution Agreement. This agreement acknowledges AIS's full cooperation throughout the investigation process. The company conducted a thorough internal review, implemented process improvements, reported the malfeasance to federal authorities, provided essential evidence to law enforcement, and promptly responded to government inquiries.

The second agreement involves a civil settlement related to two whistleblower cases that have been outstanding for almost a decade. These cases were aligned with allegations of violations under the False Claims Act concerning products that AIS no longer sells, specifically the Vega System® Knee System and an allograft tissue product from a physician consulting arrangement which ended in 2017. While these allegations were previously addressed in product liability litigation—wherein AIS vigorously defended its stance, resulting in numerous cases being dismissed as unfounded—the company has opted to settle simply to avoid the time and expense associated with prolonged litigation. AIS continues to assert that their products were adequately vetted before market release.

Notably, the Vega System knee implant has been effectively utilized by thousands of patients since its roll-out in 2010, both across the U.S. and abroad. This product has notably not faced any recalls. AIS acknowledges that while complications like loosenings can occur for various reasons—including surgical technique and patient-specific conditions—these risks are inherent in any knee implant. Between 2018 and 2019, when it became apparent that some surgical teams were not adhering to recommended guidelines, AIS took action by developing an updated surgical technique guide and offered training on correct cementing methods.

Going forward, AIS stands firm in its position that it did not knowingly contribute to any false claims submitted to the federal government and continues to assert the safety of its products. The company is dedicated to fostering a culture of compliance and maintaining ongoing collaboration with government entities to fulfill the terms of its agreements. AIS remains resolute in prioritizing patient safety and integrity in its operations as it moves ahead from these challenging investigations.