Stryker to Pay $1.35 Million to Settle Coakley Claims

Stryker Corp., a maker of artificial hips and knees, will pay $1.35 million to settle claims it marketed items without regulatory approval and misled health care providers about the use of its products, the Massachusetts attorney general said.

Stryker’s biotech unit engaged in unfair and deceptive trade practices that boosted sales of products used to strengthen and promote growth of bones, Massachusetts said in a filing in state court in Boston.

“Stryker Biotech subverted review procedures designed to safeguard patients and promoted uses of its products that were not shown to be safe or effective,” Martha Coakley, the attorney general, said today in a statement.

In October 2009, the biotech unit and former president Mark Philip were indicted by a federal grand jury for misleading the U.S. Food and Drug Administration about the use of the products. Philip, who was president from 2004 to 2008, was accused along with three sales managers of promoting therapeutics in a manner contrary to their FDA-approved use. They pleaded not guilty, according to the case docket.

As part of the Massachusetts settlement, Kalamazoo, Michigan-based Stryker didn’t admit any liability, the company said in an e-mailed statement.

Under the agreement, Stryker will pay $325,000 in civil penalties, $875,000 to fund efforts to combat unlawful marketing and other programs to benefit health-care consumers, and $150,000 to cover attorney fees and investigative costs. The company reported 2009 revenue of $6.72 billion.

Limited Approval

The attorney general’s investigation focused on the marketing of OP-1 Implant and OP-1 Putty, which are designed to promote bone growth and are used to treat conditions involving weakened bones. Under the limited FDA approval, the products could only be used with patients after receiving approval from hospital’s Institutional Review Board.

The company promoted the products beyond those limits and withheld information from health-care professionals about the restrictions, Coakley said.

The case is Commonwealth of Massachusetts v. Stryker Biotech LLC, 10-3365, Massachusetts Superior Court, Suffolk County (Boston).

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