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Avanos Medical Inc., a multi-national medical supplies company based in the U.S., has paid $22 million over misbranded surgical gowns that promised more protection than they actually provided.
Between late 2014 and early 2015, Avanos sold hundreds of thousands of MicroCool surgical gowns, totaling $8,939,000 in value, to customers in the U.S. and abroad. The company said its gowns provided the highest possible level of protection from infectious diseases in surgical and other high-risk medical settings.
However, only the U.S. Food and Drug Administration (FDA) can classify hospital gowns as meeting the standard to provide such protection. In this case, the U.S. Department of Justice (DOJ) said that Avanos' employees knew that its gowns had never met the FDA's standard. Regardless, the company continued to advertise and sell the gowns as if they had.
In November 2014, Avanos sent letters to hospitals and other potential purchasers falsely claiming that their gowns had met the more rigorous standards for proving the highest level of protection established by the FDA in 2012. The gowns hadn't.
At least one of these letters was sent to reassure a healthcare provider seeking to purchase the gowns for surgeries conducted during the 2014 Ebola outbreak.
Furthermore, the DOJ alleged that an employee and agent of Avanos obstructed a July 2016 FDA investigation into the company's surgical gown business. The employee and agent made numerous false entries in documents requested by FDA investigators, the DOJ said.
The DOJ reached a deferred prosecution agreement with Avanos because the company cooperated with its criminal investigation. The company also conducted an internal investigation.
As such, the deferred prosecution agreement requires the company to pay $22,228,000. The total includes $8,939,000 to re-compensate purchasers who bought the fraudulently marketed gowns. The total also includes $12.6 million as a criminal monetary penalty as well as a $689,000 disgorgement payment, to pay back profits made through the fraudulent sale.
"The last thing health care workers should have to worry about is whether their personal protective equipment lives up to manufacturers' claims," said acting U.S. Attorney Prerak Shah for the Northern District of Texas. "Misbranded [personal protective equipment] can pose serious risks to medical professionals and patients alike."
"All companies that do business in Texas, health care or otherwise, will be held accountable for the promises they make about their products," Shah added.
The company has agreed to reorganize and also increase funding and staffing to its compliance, regulatory and quality departments. Several times a year, a newly instated compliance and ethics officer will now regularly report its findings to the company CEO and the board of directors' compliance committee.
The company has also promised to revise its procedures for reviewing and approving marketing materials for all its medical devices.
"We have accepted responsibility for these issues, which relate to activities that
concluded in 2016 and a product that Avanos divested more than three years ago, when it sold its Surgical and Infection Prevention business," Avanos said in a statement to Newsweek.
Update (7/9/2021, 6:26 p.m.): This article has been updated to include a statement from Avanos.
