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Bone Cement Co. Synthes Indicted

June 17, 2009

Synthes, Inc. (SWX: SYST.VX) released to shareholders and the public yesterday that it has been indicted by the U.S. Attorney for the Eastern District of Pennsylvania for alleged off-label promotion of a spine product called Norian XR. The Government’s investigaiton has been ongoing since 2006; Synthes, a global medical device company, promises “to vigorously defend itself against the charges.”  The 97-count, 52-page indictment, which also charges wholly-owned subsidiary Norian Corporation as well as individual executives, alleges that Synthes illegally tested its bone cement on patients — including some vets at VA hospitals according to a watchdog group — resulting in the deaths of at least three people.

‘The Department of Defense is outraged by a company that potentially puts our military personnel, their family members, and veterans at undue risk for serious medical complications or even death, just to increase their corporate bottom line,’ said DCIS Assistant Special Agent Kenneth Maupin.

If convicted defendant Norian Corporation faces a maximum possible sentence of a fine of $26,000,000, five years probation, full restitution, forfeiture of $469,800 and special assessments of $20,800. Defendant Synthes faces a maximum possible sentence of a fine of $8,800,000, five years probation, full restitution, forfeiture of $469,800 and a special assessment of $5,500. Each of the individual defendants faces a maximum sentence of one year in prison, a fine of $100,000, full restitution and one year of supervised release.

To report healthcare fraud, medical device fraud, off-label marketing, or DoD fraud, contact Frohsin & Barger.

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