The U.S. Attorneyâ€™s Office for the Central District of California has announced that Stryker Corporation and Alliant Enterprises have paid the U.S. government a total of $1.05 million to resolve a whistleblower lawsuit. The whistleblower case alleges that the companies avoided heightened government scrutiny by failing to fully disclose information about projected government sales. The case was resolved on March 13th, when a federal judge dismissed and unsealed the case.
According to a press release by the U.S. Attorneyâ€™s Office for the Central District of California, â€ś Stryker and Alliant failed to disclose to government negotiators complete pricing information, which resulted in higher costs to government agencies that purchased medical products from the Federal Supply Schedule contract awarded by the Department of Veterans Affairs to Alliant. As a result of the conduct by Stryker and Alliant, the VA and other government agencies allegedly purchased products at inflated prices.â€ť
Stryker Corporation is a company that has several divisions, including a medical equipment division called Stryker Medical. This unit sold equipment such as critical care hospital beds, medical-surgical hospital beds and stretchers to government purchasers. The contract through which they did this was previously awarded to Alliant. According to the lawsuit, â€śâ€¦ because Alliant was used to sell the Stryker-manufactured products, the defendants provided none of Strykerâ€™s commercial pricing history to the VA for price comparison purposes, and that Alliant understated expected sales of the products, which allegedly allowed the defendants to avoid scrutiny and overcharge the VA.â€ť
A former Stryker employee filed the suit in the U.S. District Court in Los Angeles in 2008. The case was filed under the â€śwhistleblowerâ€ť provisions of the federal False Claims Act; this allows individuals to sue another party on behalf of the government. The whistleblower is entitled to a portion of the money recovered in a settlement or judgment.
The U.S. Attorneyâ€™s Office for the Central District of California and the Department of Justice Civil Divisionâ€™s Commercial Litigation Branch reached the settlements, and the Department of Veterans Affairsâ€™ Office of Inspector General investigated the case. The companies paid the settlements in December; $911,219 was paid by Stryker and $151,215 was paid by Alliant.