Allergan agrees to settlement in alleged defective Lap-Band case
News: 2018 Press Release
SACRAMENTO, Calif. — Insurance Commissioner Dave Jones announced today that Allergan Inc. has agreed to pay $500,000 to resolve allegations the company knowingly sold defective Lap-Bands to health care professionals for use in procedures to assist patients with weight loss. The settlement also resolves allegations that Allergan provided kickbacks to health care providers leading them to submit false statements for reimbursement.
"Medical device distributers and health care providers have an obligation to place patient safety ahead of profits," said Insurance Commissioner Dave Jones. "Concealing information about defective equipment and using misleading marketing practices puts patients' health at risk."
The Lap-Bands Allergan sold allegedly had defective access ports used in the implantation process on the patient—the company then concealed the defects by misrepresenting the cause of leaky ports to the FDA, the public, and health care providers.
Additionally, Allergan allegedly provided kickbacks in the form of sham advisory boards, speaking fees, proctoring events, surgeon workshops, and travel-related expenses. The kickbacks were provided to health care providers as inducements for performing unnecessary medical procedures, including banded imbrication where the stomach is folded and sutured.
On behalf of the State of California the commissioner recovered $500,000 from the settlement. In a separate settlement agreement, Allergan agreed to pay $3.5 million to the federal government for similar allegations involving Medicare fraud. The company does not admit wrong doing in either settlement.
Led by Insurance Commissioner Ricardo Lara, the California Department of Insurance is the consumer protection agency for the nation's largest insurance marketplace and safeguards all of the state’s consumers by fairly regulating the insurance industry. Under the Commissioner’s direction, the Department uses its authority to protect Californians from insurance rates that are excessive, inadequate, or unfairly discriminatory, oversee insurer solvency to pay claims, set standards for agents and broker licensing, perform market conduct reviews of insurance companies, resolve consumer complaints, and investigate and prosecute insurance fraud. Consumers are urged to call 1-800-927-4357 with any questions or contact us at www.insurance.ca.gov via webform or online chat. Non-media inquiries should be directed to the Consumer Hotline at 800-927-4357. Teletypewriter (TTY), please dial 800-482-4833.