Johnson & Johnson's Acclarent Unit in $18 Million U.S. Settlement

Johnson & Johnson's Acclarent unit paid more than $18 million to resolve U.S. claims of illegally marketing a medical device, a case that led to two senior executives being convicted of related charges.

The agreement, which Johnson & Johnson disclosed in regulatory filings without giving specifics, includes a one-time payment of $18 million, plus interest, according to documents released on Friday by the Justice Department.

The case, which had been kept under seal until the criminal case against the executives was resolved, stems from a so-called whistleblower claim filed in 2011 by Melayna Lokosky, who had been a saleswoman for Acclarent, a medical-device startup that Johnson & Johnson bought in 2010.

A spokeswoman for Johnson & Johnson said the company has since put in place tighter compliance controls. She noted the agreement, which didn't include an admission of liability or wrongdoing, resolves alleged conduct that took place almost entirely before Johnson & Johnson acquired Acclarent.

According to court documents, Acclarent senior managers directed salespeople to promote one of its products as a drug delivery device even though U.S. health regulators had rejected the use. The device, Stratus, had only been cleared as a spacer to maintain an opening to the sinus for 14 days after surgery.

Under the terms of the agreement, Ms. Lokosky received $3.5 million, plus interest, and Acclarent paid her legal expenses.

Write to Maria Armental at [e-mail]

(END) Dow Jones Newswires

July 22, 2016 16:55 ET (20:55 GMT)

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