Exactech, Inc., a developer and producer of bone and joint restoration products for hip, knee, shoulder, spine and biologic materials, announced in a press release that it has entered into a Deferred Prosecution Agreement (DPA) with the United States Attorney’s Office for the District of New Jersey (USAO) and a civil Settlement Agreement (CSA) with the United States.
The agreements resolve the investigation commenced by the USAO in December 2007 into the company’s consulting arrangements with orthopedic surgeons relating to its hip and knee products in the United States. Pursuant to the DPA, an independent monitor will review and evaluate the company’s compliance with its obligations under the DPA. The USAO specifically acknowledges in the DPA that it does not allege that the company’s conduct adversely affected patient health or patient care, according to the press release.
Under the DPA, the USAO agrees not to prosecute Exactech in connection with the matter if it satisfies its obligations during the 12-month term of the DPA. Pursuant to the CSA, the company will settle civil and administrative claims relating to the matter for a payment of $2,991,889, without any admission by the company. Exactech has also entered into a 5-year Corporate Integrity Agreement (CIA) with the Office of the Inspector General of the United States Department of Health and Human Services.
The company previously accrued approximately $3.5 million for an anticipated settlement and legal expenses related to this investigation, and therefore, these agreements are not anticipated to materially impact the Exactech’s results of operations for the fourth quarter of 2010.
Exactech Chairman and CEO Bill Petty stated in the release, “We are pleased to resolve this inquiry, which we feel is in the best interest of our stakeholders. We will continue to practice the highest standards of ethics, which have been and will continue to be hallmarks of our corporate culture.”