MEDICAL DEVICE COMPANY AND CEO CHARGED WITH SELLING UNAPPROVED MEDICAL DEVICES

FROM:  U.S. JUSTICE DEPARTMENT 

Thursday, November 13, 2014

Vascular Solutions Inc. and its CEO Charged with Selling Unapproved Medical Devices and Conspiring to Defraud the United States

An indictment was filed today charging Vascular Solutions Inc. (VSI) and its chief executive officer, Howard Root, with selling medical devices without U.S. Food and Drug Administration (FDA) approval and conspiring to defraud the United States by concealing the illegal sales activity.  The announcement was made today by Acting Assistant Attorney General Joyce R. Branda for the U.S. Department of Justice’s Civil Division, U.S. Attorney Robert Pitman for the Western District of Texas and Special Agent in Charge Antoinette V. Henry of the U.S. Food and Drug Administration (FDA)’s Office of Criminal Investigations, Metro Washington Field Office. The devices at issue are from VSI's “Vari-Lase” product line, a system designed to treat varicose veins by burning or “ablating” them with laser energy.

Root and VSI are each charged with one count of conspiracy and eight counts of introducing adulterated and misbranded medical devices into interstate commerce.  The case is pending in the U.S. District Court for the Western District of Texas.

“These charges involve a deceptive sales campaign led by the CEO of a public company,” said Acting Assistant Attorney General Branda.  “The indictment charges that the sales campaign persisted in the face of FDA warnings, a whistleblower’s complaint to the CEO and a failed clinical trial showing that the device was less safe and less effective than a product that had already been approved.  We will take action to hold corporations and their leaders responsible when they violate laws intended to protect public health.”

According to the indictment, the Vari-Lase products were cleared by the FDA only for the treatment of superficial veins, but Root and VSI sold them for the ablation, or removal, of “perforator” veins, which connect the superficial vein system to the deep vein system.  Because perforator veins come into direct contact with deep veins, treating them with lasers was a more difficult and risky procedure.

Root is charged with leading the illegal sales campaign, which lasted from 2007 until 2014, and conspiring with others to hide it from the FDA.  The indictment alleges that Root authorized the campaign after VSI failed to obtain FDA authorization to sell the Vari-Lase system for ablation of perforator veins.  The sales campaign is alleged to have ignored FDA concerns about the safety and effectiveness of the procedure and specific warnings from the FDA not to sell Vari-Lase products for treatment of perforator veins.  The indictment alleges that, with Root’s approval, the sales continued even after the company sponsored an unsuccessful clinical trial that showed that the Vari-Lase system was less safe and effective than a competing device that the FDA had cleared for perforator vein treatment.  According to the indictment, the sales continued even after a whistleblower complained to Root in 2009 and the government told the company about its investigation in 2011.

The indictment also charges VSI and Root with deceiving the FDA.  In late 2007, Root decided to launch a special “Short Kit” designed for perforator vein treatment, despite the lack of FDA marketing authorization, by claiming that the product was intended for “short vein segments” or “short veins.”  At the same time, the government alleged that internal company documents approved by Root taught the sales force that these terms included perforator veins and urged salespeople to suggest to health care providers that Vari-Lase devices could be used to treat perforator veins.  After learning about the government’s investigation, members of the sales force began using the term “short vein segments” in field trip reports to disguise that they were still selling Vari-Lase devices for perforator vein treatment, according to the indictment.  Two other members of the sales force are alleged to have misled investigators; in addition, the indictment charges that one member falsely denied his conduct and another tried to scapegoat a low-level salesman.

In July 2014, VSI agreed to pay $520,000 to resolve allegations that it caused false claims to be submitted to federal health programs by marketing the Vari-Lase devices for treating perforator veins.  In that civil action, the government alleged that VSI knowingly caused physicians and other purchasers of the Short Kit to submit false claims to federal health care programs for uses of the Short Kit that were not reimbursable.

“FDA is committed to protecting the public health and the integrity of the regulatory system,” said Special Agent in Charge Henry.

The case is being prosecuted by Trial Attorney Timothy Finley of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Bud Paulissen of the Western District of Texas.  The case was investigated by the FDA’s Office of Criminal Investigations and the U.S. Department of Health and Human Services’ Office of the Inspector General.

An indictment is merely an allegation, and every defendant is presumed innocent until proven guilty beyond a reasonable doubt.