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Volume XI, Number 261

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Dangerous Algorithm: Medical Device Companies Pay $38.75 Million Settlement

Starting a new medication is sufficiently fraught with danger without having to worry about a drug monitoring system failing.  Absent proper monitoring, anticoagulant drugs can cause serious harm, from the extremes of major bleeding to clots and strokes.  Alere, Inc. and Alere San Diego Inc. (“Alere”) allegedly knowingly sold defective INRatio blood coagulation monitors from 2008 to 2016.  Medicare beneficiaries used these defective rapid point-of-care testing devices in conjunction with anticoagulant drugs, and billing Medicare for a device which is “neither reasonable and necessary, nor safe and effective” constitutes fraud.

The United States Department of Justice settled a case against this medical device manufacturer for a $38.75 million plus interest, of which $18.84 million is restitution.  For reporting Medicare fraud, a whistleblower is entitled to receive 15-25% of the government’s recovery.

Alere’s INRatio blood coagulation monitoring systems are designed for use by both patients at home and providers in a professional setting.  The product consists of a reusable meter and disposable test strips.  The INRatio system’s software relies upon its algorithm accurately interpreting “changes in the electrical impedance in a blood sample.”  Unfortunately for patients whose INRatio readings presented as a convex or “ski slope” curve, the INRatio algorithm had a “system limitation” and was not able to “reliably determine” the time it takes for blood to clot in patients with these readings.  Since 2008, the software developer and internal staff repeatedly warned Alere of the dangers of this flaw in the system, yet Alere represented to the U.S. Food and Drug Administration (FDA) that the product was thoroughly vetted and safe.  The device remained on the market until 2016, when Alere faced a nationwide Class 1 product recall initiated by the FDA.

This fraudulent conduct resulted in real patient harm, and the device manufacturer allegedly knew that its device led to over a dozen deaths and hundreds of injuries due to abnormal bleeding.  Moreover, claims were submitted to Medicare for INRatio, meaning Medicare paid for a defective system which the manufacturer allegedly knew was defective.  The manufacturer’s obfuscation allegedly harmed the public and defrauded the government.  One government official said in connection to this case, “Medical device providers who cut corners or purposefully market defective tools put profit above patient health.”

The Department of Justice needs whistleblowers to report fraud involving defective medical devices in order to hold companies accountable for manufacturing devices which help, not harm, vulnerable consumers.

© 2021 by Tycko & Zavareei LLPNational Law Review, Volume XI, Number 196
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About this Author

Eva Gunasekera WHistleblower and Government Fraud  Attorney Tycko & Zavareei LLP Law Firm
Partner

FORMER DOJ SENIOR COUNSEL FOR HEALTH CARE FRAUD, NOW REPRESENTING WHISTLEBLOWERS

(202) 973-0900
Renée Brooker Whistleblower Lawyer Tycko & Zavareei Law Firm
Partner

FORMER PROSECUTOR IN SENIOR LEADERSHIP POSITION AT DOJ, RESPONSIBLE FOR BILLIONS OF DOLLARS IN RECOVERIES UNDER WHISTLEBLOWER LAWS, NOW REPRESENTING WHISTLEBLOWERS

(202) 417-3664‬
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