West Chester medical-device manufacturer Synthes Inc. and its Norian Corp. subsidiary formally pleaded guilty Tuesday to charges that they illegally experimented with a bone cement on patients' spines and will pay fines totaling $23.2 million.
Synthes also agreed to sell Norian and enter a corporate-integrity agreement, according to an agreement reached with the U.S. Attorney's Office and the Department of Health and Human Services.
Norian tested the cement from 2002 to 2004 on 200 patients, though the bonding agent explicitly stated it was "not intended for treatment of vertebral compression fractures."
Three of the patients died. Doctors said they could not rule out the bone cement as a cause.
"The government is pleased with this resolution," said Mary E. Crawley, the assistant U.S. attorney who prosecuted the case. "We believe it is a fair resolution of one aspect of this very important case."
U.S. District Judge Legrome D. Davis has not yet scheduled sentencing for four executives who pleaded guilty to charges in the case: former Synthes North America president Michael D. Huggins, 51, of West Chester; former senior vice president Thomas B. Higgins, 52, of Berwyn; vice president Richard E. Bohner, 55, of Malvern; and director of regulatory and clinical affairs John J. Walsh, 46, of Coatesville.
"Synthes is a great company," the company's lawyer, Donald J. Goldberg of Ballard Spahr, Andrews & Ingersoll, said in an e-mail. "Mistakes were made. They've been rectified. Case over."
Norian pleaded guilty to conspiracy to impede federal safety standards, a felony, and 110 related misdemeanors. Synthes pleaded guilty to the misdemeanor of shipping a mislabeled product.
Norian would be excluded from participating in Medicare and other government-funded health-care programs if it remained a Synthes subsidiary. According to its agreement with the government, Synthes has to divest Norian by May 24.
Synthes, whose shares trade on the Swiss stock exchange, is one of the world's largest makers of surgical screws, plates, and implants. It employs 10,700 people worldwide and had 2009 revenues of $3.4 billion and profits of $824 million.