Have You Been Injured? We're Ready to Fight for You.

Former Drug Company CEO Sentence for Illegal Marketing

Published on Sep 13, 2015 at 11:27 pm in Product Liability.

Marketing surgical aides without prior approval and consent of the FDA is illegal, and to that end OtisMed Corp.’s former CEO was sentenced to prison for two years on Friday (24th July, 2015) for the unapproved distribution of knee replacement surgery guides under false pretense of being exempted from FDA’s pre-market notification for clearance.

Earlier Action

Both Charlie Chi and OtisMed Corp., a subsidiary of Stryker since it was bought in 2009, had pleaded guilty December last year and was fined $34.4 million in general, $5 million in criminal forfeiture, and an additionally agreed $41 million to close a related civil settlement.

The Problem

OtisMed’s device served as a guide that assisted surgeons in making accurate and correct bone cuts before placing the artificial knee prostheses in patients. However, the company marketed the device using claims that were not evaluated by FDA, making the promotional materials and ads illegal. In most cases, the FDA must approve medical devices to protect the public against unnecessary personal injuries.

OtisMed had submitted to the FDA a pre-market notification for clearance so that they could start conducting marketing of the device in 2008. However, the company’s submission was denied by the FDA as it stated that the device’s effectiveness or safety had not yet been proven. However, as the Department of Justice found, during the duration of the clearance, OtisMed started giving false reports about the device’s exemption from these pre-market requirements to the doctors and other related professionals.

While the board of the company decided to stop the shipping immediately, Chi went ahead anyway according to the Department of Justice. Chi and OtisMed admitted that that company had ordered these devices a week after the denial by the FDA.

The Lawyer and Stryker

Evidence revealed by the Department of Justice shows that last year, Chi had communicated to Modern Healthcare claiming that the devices were being shipped by OtisMed and the FDA had full knowledge of it.

Along with this, Stryker stated that it shows great importance to lawful and ethical conduction of its affairs, and that OtisMed conducted this criminal activity before it had been acquired by Stryker, and hence they had no prior knowledge of the incidence.

Claire C. Cecchi, the US District Judge in Newark, NJ, also ordered that Chi serve a year’s worth of supervised release and also pay a fine of $75,000.

Meet Your Team

Tad Thomas - Trial Lawyer

Tad Thomas

Managing Partner

Tad Thomas has dedicated his practice to representing plaintiffs in various types of civil litigation, including personal injury, business litigation, class actions, and multi-district litigation.

After graduating with his law degree in 2000 from Salmon P. Chase College of Law at Northern Kentucky University, Mr. Thomas immediately opened his own private practice and began representing injury victims.

In 2011, Thomas Law Offices was established in Louisville, Kentucky. Over the past decade, Mr. Thomas has expanded his firm and now has offices in three additional locations: Cincinnati, Ohio, Columbia, Missouri, and Chicago, Illinois. He is also a frequent lecturer on topics like trial skills and ethics and technology.

Free Case Evaluation

At Thomas Law Offices, our personal injury attorneys recognize that our potential clients are likely going through some of the most difficult times of their lives. We don't want you to have to worry about paying out-of-pocket for legal advice when you're just starting to learn your legal rights and options. That's why we provide free case evaluations. We'll offer our expert advice about your potential case and walk you through how we can help you.

Call us or fill out the form below to tell us about your potential case and a personal injury lawyer will get back to you as quickly as possible.

Legal & Firm News

What You Need to Know About Business Litigation and Contingency Fees

If your business has ever been involved in a legal matter, you may be surprised to hear the two phrases together: business litigation and contingency fees. Traditionally, it has been more common to associate a contingency fee model with personal injury law involving individual parties rather than businesses. But this is no longer always the […]

Read More

Signs of PTSD in Military Service Members

It’s estimated that up to one-third of military service members suffer from PTSD. PTSD, post-traumatic stress disorder, is a mental health condition that can develop following a traumatic event. This usually means an event involving actual or threatened death, serious injury, or abuse. People who have seen combat, witnessed death, or experienced a life-threatening situation […]

Read More

AAA Conducts Study Examining Travel Before and During COVID-19

In 2021, new research from the AAA Foundation for Traffic Safety’s New American Driving Survey revealed shifts in driving, traveling, and commuting patterns in the United States. The statistics gathered between July 2019 and December 2020 cannot be analyzed without consideration of COVID-19’s unignorable impact on the numbers—numbers showing marked differences from previous years’ findings.

Read More