By Jonathan Stempel
(Reuters) - Johnson & Johnson (NYSE:JNJ) and its DePuy Synthes unit will pay $9.75 million to settle U.S. Department of Justice accusations that DePuy illegally provided free products to a Massachusetts surgeon who used them in spinal surgeries in six Middle Eastern countries.
According to settlement papers, the surgeon used more than $100,000 of DePuy's implants and instruments between July 2013 and Feb. 2018 in more than 20 surgeries in Bahrain, Kuwait, Lebanon, Qatar, Saudi Arabia and the United Arab Emirates.
The Justice Department said DePuy provided the products to induce the surgeon to use its products in spinal surgeries he performed in Boston on patients who, unlike in the overseas surgeries, were covered by the government's Medicare and Medicaid health programs.
This activity violated the federal False Claims Act and an anti-kickback law meant to ensure that doctors act in their patients' best interests without being compromised by improper financial incentives, the Justice Department said.
The $9.75 million payment includes a $4.33 million fine and $5.42 million in restitution. A whistleblower, Aleksej Gusakovs, will receive about $1.85 million from the settlement. The Justice Department credited DePuy for cooperating in the probe.
In a statement, DePuy said the settlement avoids further lengthy legal proceedings, and that it was "committed to ensuring our employees conduct business in a way that complies with our credo and with all laws and regulations."
The False Claims Act lets whistleblowers sue on behalf of the government, and share in recoveries. DePuy is based in Raynham, Massachusetts, and Johnson & Johnson in New Brunswick (NYSE:BC), New York.