A whistleblower will receive $2.2 million of the $13.5 million dollar settlement announced in late July between NuVasive, Inc. and the U.S. Department of Justice.
The company did not admit to any wrongdoing in the settlement, nor did the Justice Department require the usual Corporate Integrity Agreement (CIA) that allows the government to continue monitoring activities from inside the company.
The Corporate Whistleblower Center issued a press release on August 12, 2015, divulging the whistleblower amount. The Center also said the settlement “resolves allegations that NuVasive knowingly offered and paid illegal remuneration to certain physicians to induce them to use the CoRoent System in spine fusion surgeries, in violation of the federal Anti-Kickback Statute.” The Center also said the marketing of the system was not approved by the FDA.
SOLAS Noted
“The alleged illegal remuneration consisted of promotional speaker fees, honoraria and expenses relating to physicians’ attendance at events sponsored by a group known as the Society of Lateral Access Surgery (SOLAS). SOLAS was allegedly created, funded and operated solely by NuVasive, despite its outward appearance of independence, ” continued the press release.
The government issued a federal administrative subpoena to the company in the second quarter of 2013. The subpoena sought discovery of documents for the period January 2007 through April 2013. The exact details of the investigation were never disclosed by the government or the company. However, former CEO Alex Lukianov previously stated that the subpoena was a very broad document request, “focused on interbody with regard to Quadrant and biologics, both Osteocel and FormaGraft, but it’s very broad.”
When a preliminary agreement between NuVasive and the government was announced in March, Wells Fargo analyst Larry Biegelsen said he believed the amount of the settlement was relatively immaterial, saves the expense and impact of a CIA on selling operations and makes it easier for the company to “participate in industry consolidation.”
The government said NuVasive cooperated fully with the investigation and the new leadership team at NuVasive appears to have finally put this episode behind them.
