The federal jury in San Antonio found the CEO of the vascular disease medical device company not guilty of alleged off-label promotion of the Vari-Lase Short Kit. Howard Root in a statement described the case against him as "obscene" and "malicious."
Federal prosecutors in the United States have started to personally go after medtech company executives when it come to the marketing of their companies' products. But that strategy has backfired spectacularly in the case of Vascular Solutions CEO Howard Root.
A federal jury in San Antonio, TX, has found Root not guilty of felony charges related to alleged off-label promotion of a laser ablation device for treating varicose veins, the Maple Grove, MN-based vascular disease medical device company announced Friday.
"The company and I are vindicated by today's verdict, but outraged by the obscene legal process we were forced to endure. We are appalled by the malicious behavior and lack of substantive oversight of the government officials who pursued this matter," Root said in a statement shared by the company.
Off-label promotion, the marketing of a medical device for a use not indicated to FDA, has been a legal gray area in the medical device industry. Root's defense was partly based on an argument straight out of the U.S. Constitution: You can't prosecute people for saying things that are true.
Root's victory will likely cheer other medtech executives making First Amendment arguments in similar cases. A freedom of speech argument, for example, is being made in U.S. District Court in Massachusetts by former Acclarent CEO William Facteau and sales vice president Patrick Fabian, who are accused of fraudulent activities and skirting of FDA rules in the years leading up to the company's 2010 acquisition by Johnson & Johnson. The trial of the two men is scheduled to commence in May.
Root sounded a note of defiance on Friday: "Every investigation that is being conducted by the prosecutors who were assigned to our case needs to be independently reviewed by the Department of Justice to make sure that their abusive and dishonest tactics are not being used on others. Furthermore, every current investigation of a medical device company concerning 'off-label' promotion needs to be reviewed by the Department of Justice to make sure their prosecutors' theories comply with the law, not just their wishes."
Federal prosecutors had claimed that Root and VSI had led a sales campaign from 2007 until 2014 that sold Vari-Lase products for the ablation of "perforator" veins, which connect the superficial vein system to the deep vein system, even though the products were only cleared by FDA for the treatment of superficial veins.
"This case centered on just one version of just one of our more than 100 medical devices--a version that was FDA-cleared, made up only 0.1% of our sales, and, by the government's own admission, never harmed a single patient. To say that this prosecution was wrong-headed and disproportionate would be the understatement of the year," Root said.
In July 2014, Vascular Solutions 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, though the company did not admit any fault or liability. Four months later, a federal grand jury indicted Root.
It cost Vascular Solutions $25 million to defend itself against the criminal prosecution.
"Vascular Solutions is fortunate to have had the financial strength and dedicated employees necessary not only to fight, but to win," Root said. "Most other companies would have been destroyed before they even set foot in the courtroom. In order to ensure that what happened to Vascular Solutions doesn't happen to a defenseless company or individual, changes need to be made in the personnel and culture at the Department of Justice."
Learn more about cutting-edge medical devices at BIOMEDevice Boston, April 13-14, 2016.
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