DOJ quietly settles Stryker case

by Ben Vernia | January 31st, 2012

The U.S. Attorney’s Office for the District of Massachusetts did not issue a press release announcing the guilty plea of Stryker Biotech to a misdemeanor misbranding count and the payment of a $15 million fine. That might be because the result fell substantially short of the felony conviction DOJ hoped for in the case. As the company announced:

As part of the settlement, Stryker has agreed to plead to one misdemeanor charge and pay a non-tax deductible fine of $15 million. As a result of this resolution, the Department of Justice has agreed to dismiss all thirteen felony charges against Stryker Biotech contained in a 2009 federal grand jury indictment. Stryker had previously disclosed in March 2009 that its Biotech division was the target of a federal grand jury investigation being conducted by the U.S. Attorney’s Office for the District of Massachusetts. With today’s announcement, Stryker believes it has realized its goal of obtaining an appropriate resolution of this matter.

Settlement of the case came shortly after opening arguments in the criminal trial, and did not compromise the company’s civil and administrative liability for the conduct, according to the plea agreement. No CIA has been imposed, but the plea agreement states that the company, a subsidiary of Stryker Corp., did not engage in sales and marketing and no longer had a marketable product. Out of five orthopedic device makers to settle claims with the New Jersey U.S. Attorney’s office in 2007, Stryker alone escaped imposition of a Corporate Integrity Agreement and a monitor. At the time, then-U.S. Attorney Chris Christie claimed that the company had earned the exception by virtue of its cooperation.

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