Medical device company C.R. Bard Inc. and its wholly owned subsidiary, Pro Seed Inc., sells brachytherapy seeds, a form of radiation therapy, to hospitals across the country. The seeds are permanently implanted in the prostate to deliver a prescribed dose of radiation directly to the cancer cells. Hospitals may order such seeds from several different manufacturers, including C.R. Bard and Pro Seed, and Medicare pays the price billed for the seeds. In turn, we believe the ordering physicians and hospitals are largely price insensitive.

According to Julie Darity, a former C.R. Bard contracts administration officer, C.R. Bard and Pro Seeds captured a large percentage of the brachytherapy seed market from 1998 to 2006 by paying sizeable kickbacks to health care providers. Darrity specifically alleged in a False Claims Act qui tam action that the companies customized offers to providers after assessing the customers’ financial needs. For example, the companies allegedly offered physicians unrestricted grants, rebates, advertising campaigns, and even free medical equipment, all with the purpose of inducing providers to buy their brachytherapy seeds at inflated prices.

C.R. Bard Inc. paid the United States $48.26 million to resolve many of the above allegations, which the United States alleged has caused false claims to be submitted to the Medicare program for brachytherapy seeds used to treat prostate cancer in violation of the False Claims Act. For filing the qui tam lawsuit and assisting the government’s seven-year-long investigation, Ms. Darity received $10,134,600, or 21% of the government’s recovery.

Also, according to a non-prosecution agreement with the United States, C.R. Bard agreed to pay an additional $2.2 million and to take numerous remedial steps, many of which the company identified and began to implement prior to the criminal investigation. For example, C.R. Bard agreed to refine its Code of Conduct and other written policies and procedures that promote C.R. Bard’s commitment to full compliance with all federal health care program requirements.

More information for whistleblowers is located at the Nolan Auerbach & White website.