Category: MIL-OSI

Source: United States Department of Justice Criminal Division

Kimberly-Clark Corporation (Kimberly-Clark), a U.S.-based multinational consumer goods and personal care company, has agreed to pay up to $40.4 million to resolve a criminal charge relating to the company’s sale of adulterated MicroCool surgical gowns.

“Kimberly-Clark betrayed the trust placed in it by consumers and healthcare providers when it chose to defraud the FDA and bring adulterated surgical gowns to market for its own financial gain,” said Acting Assistant Attorney General Matthew R. Galeotti of the Justice Department’s Criminal Division. “Today’s resolution demonstrates the Criminal Division’s unwavering commitment to holding corporations accountable when they threaten the integrity of our healthcare system. This resolution, in which the company has agreed to pay up to $40 million, sends a clear message that those who endanger patients and medical professionals will face significant criminal penalties.”

“Companies that sell medical products cannot misrepresent the safety and quality of those products,” said Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division. “The Department of Justice will continue to vigorously enforce laws that protect patients and medical professionals.”

A criminal information filed today in U.S. District Court in the Northern District of Texas charges Kimberly-Clark with one count of introducing adulterated surgical gowns into interstate commerce with an intent to defraud and mislead. According to court filings, a Kimberly-Clark employee conducted fraudulent testing on Kimberly-Clark’s MicroCool gowns to avoid having to submit a premarket notification to the U.S. Food and Drug Administration (FDA) after Kimberly-Clark made a change to the gowns. A premarket notification is meant to show FDA that a medical device is as safe and effective as an already legally marketed device. Based on the fraudulent testing, Kimberly-Clark sold the gowns after the change without a new premarket notification, marketing the gowns as providing the highest level of protection against fluid and viruses.

Under the terms of a deferred prosecution agreement filed with the criminal information, Kimberly-Clark will pay up to $40,400,000, which consists of a monetary penalty of $24,500,000, a forfeiture of profits of $3,900,000, and up to $12,000,000 in victim compensation. The deferred prosecution agreement resolves a criminal investigation into Kimberly-Clark’s sale of its adulterated MicroCool surgical gowns under the Federal Food, Drug, and Cosmetic Act (FDCA).

According to court documents, surgical gowns sold in the United States are subject to regulation by the FDA, which recognizes a system of classification set forth by the American National Standards Institute (ANSI) and the Association for the Advancement of Medical Instrumentation (AAMI) — known as the ANSI/AAMI PB70 standard. The ANSI/AAMI PB70 standard was first established in 2003 and revised to be more rigorous in 2012. Under the standard, the highest protection level for surgical gowns — AAMI Level 4 — is reserved for gowns intended to be used in surgeries and other high-risk medical procedures on patients suspected of having infectious diseases. To establish compliance with the standard, a surgical gown needs to demonstrate blood-borne pathogen resistance in each of several critical zones, including the sleeve, by preventing fluids from penetrating the gown.

As part of the deferred prosecution agreement, Kimberly-Clark admitted that, with an intent to defraud and mislead and to avoid filing a 510(k) premarket notification with FDA for its MicroCool gowns, an employee of Kimberly-Clark directed the preparation of test samples for the surgical gowns that did not meet the requirements of AAMI Level 4 testing. Kimberly-Clark further admitted that between late 2013 and late 2014, it sold millions of adulterated MicroCool surgical gowns labeled as AAMI Level 4 after the fraudulent testing and without a new 510(k) FDA premarket notification. In total, Kimberly-Clark sold approximately $49,000,000 worth of adulterated MicroCool gowns to customers in the United States and abroad.

As part of the criminal resolution, Kimberly-Clark agrees to continue to cooperate with the Justice Department and to report any evidence or allegation of a violation of section 510(k) of the FDCA. Kimberly-Clark has further agreed to strengthen its compliance program and abide by reporting requirements, which require the company to submit a report to the government regarding the status of Kimberly-Clark’s enhancements to its compliance program and internal controls, policies, and procedures aimed at deterring and detecting violations of section 510(k) of the FDCA, and the status of its remediation efforts.

The government reached this resolution with Kimberly-Clark based on a number of factors, including the nature and seriousness of the offense conduct and Kimberly-Clark’s failure to timely and voluntarily self‑disclose the offense conduct to the Department. In addition, Kimberly-Clark fully cooperated with the investigation conducted by the government, including by conducting a thorough internal investigation, meeting requests from the government promptly, making factual presentations to the government, and producing extensive documentation to the government.

The government considered that Kimberly-Clark ceased manufacturing surgical gowns when it spun off its healthcare division in November 2014, as Halyard Health, Inc., which later became Avanos Medical, Inc. It also considered that it did not uncover evidence that patients suffered physical harm because of the misbranding.

The criminal case was investigated by the FDA’s Office of Criminal Investigations.

Trial Attorneys David Gunn, Max Goldman, and Amanda Kelly of the Civil Division’s Consumer Protection Branch, and Jacob Foster, Acting Chief of the Criminal Division’s Health Care Fraud Unit, prosecuted the case.

The Criminal Division’s Fraud Section is responsible for investigating and prosecuting health care fraud (HCF) matters. Additional information about the Justice Department’s HCF enforcement efforts can be found at https://www.justice.gov/criminal/criminal-fraud/health-care-fraud-unit.

Source: United States Department of Justice Criminal Division

The Justice Department today secured an agreement with the North Carolina Department of Adult Corrections (NCDAC) to ensure that incarcerated individuals with hearing disabilities are provided effective communication and the opportunity to participate equally in NCDAC’s prison services, programs, and activities.  NCDAC operates more than 50 prison facilities and houses more than 30,000 individuals.

The agreement resolves complaints under the Americans with Disabilities Act (ADA) alleging that NCDAC fails to provide incarcerated individuals with hearing disabilities with sign language interpreters, hearing aids, cochlear implants, text telephones, videophones, and other auxiliary aids and services.  Under the settlement agreement, NCDAC will identify and accommodate incarcerated individuals with appropriate auxiliary aids and services, as well as provide training on the ADA to staff.

“The ADA requires effective communication for incarcerated individuals with hearing disabilities so they have access to critical programs, including religious and vocational services,” said Assistant Attorney General Harmeet K. Dhillon of the Justice Department’s Civil Rights Division. “The Civil Rights Division is committed to eliminating barriers, including communication barriers, that prevent individuals with disabilities from participating fully in prison programs.”

To learn more about the Civil Rights Division visit www.justice.gov/crt, and to report possible violations of federal civil rights laws go to www.civilrights.justice.gov. For more information on the ADA, please call the department’s toll-free ADA Information Line at 800-514-0301 (TTY 1-833-610-1264) or visit www.ada.gov.