Huntley-based medical device manufacturer Life Spine Inc. and two of its executives have agreed to pay nearly $6 million to settle a federal lawsuit that alleged the executives paid kickbacks to doctors to use their products.
Life Spine will pay $5.5 million under the settlement reached with the U.S. Court for the Southern District of New York. While the company acknowledges it made "historical shortcomings" in its compliance program, it has "made significant progress formalizing and strengthening' the program, which began before the federal complaint, according to a statement from Life Spine.
Founder and CEO Michael Butler agreed to pay $375,000, and Vice President of Business Development Richard Greiber agreed to pay $115,000, according to the U.S. attorney's office for the Southern District of New York. The two also acknowledged and accepted responsibility for the conduct, the attorney's office added.
The lawsuit, filed in New York last July, claimed Life Spine, as well as Butler and Greiber, violated the False Claims Act by paying millions of dollars in consulting fees, royalties and intellectual property acquisition fees to surgeons to induce them to use the company's spinal implants, devices, and equipment. The complaint alleged about half of Life Spine's total domestic sales of spinal products from 2012 through 2018 were a result of the kickbacks.
Life Spine said it settled the lawsuit so it could focus on developing new products and devices. The company added the federal complaint never questioned the quality, safety, or effectiveness of its products.