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CASE 0:11-cv-00022-DWF -AJB Document 45 Filed 01/27/11 Page 30 of 35sustaining shock, were implanted by physicians into patients in the United States after July28, 2004. Approximately 150 of the implants were in Medicare patients.130. The implantation of Renewal devices with the arcing defect when nondefectivedevices were available was “not reasonable and necessary for the diagnosis ortreatment of illness or injury or to improve the functioning of the malformed body member.”42 U.S.C. § 1395y(a)(1)(A).131. The FDA classified the June 17 letters as Class I recalls for those devices.132. Class I recalls are the most serious type of recall and involve situations inwhich there is a reasonable probability that use of the product will cause serious adversehealth consequences or death. 21 C.F.R. § 7.3(m)(1).133. The FDA ultimately determined that the Prizm 2 devices that had beenmanufactured before the April 2002 manufacturing corrective action and the Renewaldevices that had been manufactured before the August 26, 2004, stop shipment date wereadulterated.134. Guidant LLC has been convicted of two misdemeanors relating to the arcinginvestigation. Count One, relating to the Prizm, is under section 331(q)(2) (prohibition onthe submission of a report to the FDA that is false or misleading in any material respect) andrelates to the August 2003 report that stated that the design change did not affect the safetyof the device. Count Two, relating to the Renewal, is under section 331(q)(1)(B) (failure tofurnish any notification or other material required under the FDCA) and relates to the March2005 Product Update, which was a correction that was not properly reported to the FDA.30
CASE 0:11-cv-00022-DWF -AJB Document 45 Filed 01/27/11 Page 31 of 35VII.FALSE CLAIMS135. As a result of its fraudulent course of conduct, Guidant knowingly caused thesubmission of false or fraudulent claims for implants of faulty Prizm 2 and Renewal devicesto the Medicare program. These false or fraudulent claims were not eligible for paymentbecause the services were not “reasonable and necessary for the diagnosis or treatment ofillness or injury . . . .” 42 U.S.C. § 1395y(a)(1)(A).136. A list of claims submitted to Medicare relating to the implant of the faultyPrizm 2 and Renewal devices at issue in this matter has been compiled in an electronic dataformat that will be served on Guidant contemporaneously with the United States’ ComplaintIn Intervention. The detailed claims information includes (a) the facility at which the implanttook place; (b) the patient’s name and Medicare ID number; (c) the type of device and datethe device was manufactured; (d) the date of the implant; and (e) the amount paid for theservices relating to the implant of the device that was paid by Medicare. The claims data hasnot been filed on the public record in order to protect confidential patient informationcontained therein.137. By way of example, listed below are ten example false claims to Medicare forthe implantation of the Prizm and Renewal devices into patients, including six false claimsfor Prizm devices implanted in this District.31
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