2025 Significant Settlements

HELEN K. RYAN & LAURA K. SCHWENDEMAN *

Introduction

This chapter summarizes a selection of significant settlements[1] in 2025 between members of the food and drug industry and government agencies, such as the U.S. Department of Justice (DOJ) and the U.S. Food and Drug Administration (FDA). As with prior years’ “Significant Settlements” chapters, we have included settlements arising from enforcement actions brought by the DOJ under the False Claims Act (FCA) and Anti-Kickback Statute (AKS) and enforcement actions involving violations of the Federal Food, Drug, and Cosmetic Act (FDCA).

The FDCA-specific resolutions pertain to a variety of issues, such as unapproved medical devices due to reintroduction of a significantly changed or modified device, misbranded medical devices due to concealment of known defects, and failure to provide FDA with prior import notice. Consistent with prior years, the settlements arising from enforcement of the FCA, which imposes liability on persons and companies who defraud governmental programs and contracts, and the AKS, which prohibits the knowing and willful payment of remuneration to induce or reward referrals of items or services that are reimbursable by federal healthcare programs, far outnumber those for violations of the FDCA. These FCA and AKS resolutions include the first time a management consulting firm has been held criminally liable for advice resulting in the commission of a crime by a client; two settlements involving falsified, misrepresented, manipulated, and duplicated data and images related to federally funded research; and kickback allegations relating to high-profile migraine and HIV medications.

The Federal Food, Drug, and Cosmetic Act

Below is a review of several settlements between the government and the food and drug industry involving alleged violations of the FDCA brought by DOJ in 2025.

This past year marked a significant reorganization of the DOJ’s enforcement structure related to FDCA enforcement.[2] On September 25, 2025, DOJ created the Enforcement & Affirmative Litigation Branch in the Civil Division, assigning civil cases arising under the FDCA, Consumer Product Safety Act, Federal Trade Commission Act, and other statutes to the new Enforcement Section, one half of the new branch. In its announcement, DOJ stated that some of the new section’s priorities will include “unfair and deceptive trade practices from China, or false and misleading claims about drugs and dietary supplements manufactured by pharmaceutical companies.”[3] This reorganization is a part of the broader dissolution of the DOJ’s Consumer Protection Branch (CPB) on September 30, 2025.

CPB was previously primarily responsible for both criminal and civil enforcement action under statutes relating to consumer protection, including the FDCA. Following dissolution of CPB, DOJ’s FDCA enforcement functions are split, with civil functions in the Civil Division’s Enforcement & Affirmative Litigation Branch and criminal functions in the Criminal Division’s Health & Safety Unit (HSU) of the Fraud Section, the latter of which was established on December 2, 2025.[4] In updating its website after the reorganization late last year, DOJ characterized HSU’s priorities as “criminal actions against companies and individuals who fail to maintain sanitary facilities, distribute adulterated or misbranded food or drug products, conceal safety-related information from the FDA, or make significant misrepresentations to the public.”[5] It remains to be seen whether this overhaul will result in any substantive changes to the manner, methods, or strategy for FDCA enforcement actions.

A. Food

1. 1. Able Groupe Inc.[6]

Able Groupe Inc. (Able Groupe) agreed to pay $304,640 as part of the DOJ’s $2.3 million total recovery proposal under its plea agreement for failing to provide prior notice to FDA before importing food, in violation of the FDCA. This case marks the first time a defendant has pled guilty to a felony violation for failing to provide prior import notices to FDA. Able Groupe admitted to selling infant formula to U.S. consumers in 2019 after importing the formula products from Europe without prior notice to FDA. Some of Able Groupe’s infant formula products were listed on FDA Import Alerts due to their failure to meet nutrient or labelling requirements, and the company admitted it used false commodity descriptions as a means to avoid detection and detention of the products upon their entry into the United States. In 2021, an FDA inspection revealed over 76,000 units of formula were smuggled into the U.S., after which the company recalled the units and ceased operations.

B. Drugs

2. AniCell Biotech LLC[7]

AniCell Biotech LLC (AniCell) agreed to a consent decree of permanent injunction to settle allegations of distributing unapproved and adulterated animal drugs in violation of the FDCA. AniCell operated out of two facilities in Arizona, where DOJ alleged that it made and distributed animal cell- and tissue-based products (ACTPs) derived from the amniotic tissue of horses for use in animals without the approval of FDA.

The government’s complaint also alleged that the company and its CEO made claims on its website and in promotional materials that the ACTPs were intended for use in animals to treat various diseases and to promote tissue regeneration and healing. In response, FDA issued multiple warnings to the company, including a written warning letter regarding its need to submit its new animal drugs to FDA for approval, and conducted several inspections. Under the consent decree, AniCell is enjoined from violating the FDCA and is required, among other things, to destroy its unapproved products, allow future audits and inspections, and to cease operations of its facilities until it is in compliance with the consent decree, with a few exceptions.

C. Medical Devices

1. 1. Aesculap Implant Systems[8]

Aesculap Implant Systems LLC (AIS) agreed to pay $38.5 million as part of a civil settlement and non-prosecution agreement to resolve allegations of violations of the FDCA, including its introduction of two adulterated medical devices into interstate commerce without proper FDA clearance due to a former AIS employee’s alleged fraud. The non-prosecution agreement stated that the employee was in charge of the AIS’s FDA clearance submissions for two surgical medical devices and had fraudulently represented to his employer—verbally and through forged documents—that the devices had been cleared by FDA despite him having never submitted any documentation. The former AIS employee has since pled guilty to one felony count of violating the FDCA and was sentenced to one year in prison and one year of supervised release in 2024. AIS has since recalled the two surgical devices, obtained FDA clearance for both, and fully reimbursed all purchasers who bought the devices before true clearance was obtained.

The settlement also resolves allegations of violations of the FCA. AIS sold a knee replacement implant medical device system to physicians and hospitals despite allegedly knowing and without disclosing that it would fail prematurely after surgery. DOJ alleged that this ultimately resulted in false claims being made to Medicare and Medicaid. The device’s issues resulted from the implant’s failure to properly adhere to the bone cement in patients’ knees, causing the device to loosen from the bone.

Finally, this settlement resolves AKS allegations that the company knowingly and willfully made unlawful payments to a Georgia orthopedic surgeon after he experienced issues with the knee replacement implant device system. The company allegedly offered and paid remuneration to induce the surgeon to recommend and continue to use their medical devices in the form of consulting payments, free international travel, entertainment, and more.

After the alleged false claims and alleged offers of remuneration, a number of events ensued: two third-party distributors filed a qui tam whistleblower suit, physicians complained about the knee replacement device system, AIS allegedly failed to track, record, and report adverse incident reports to the FDA, and the company chose to stop selling all of its knee replacement medical devices.

1. 2. Kimberly-Clark Corporation[9]

Kimberly-Clark Corporation (Kimberly-Clark) agreed to pay $40.4 million to resolve federal criminal charges brought by DOJ for alleged violations of the FDCA. DOJ alleged that Kimberly-Clark introduced adulterated medical devices (disposable surgical gowns) into commerce by selling them to hospitals and healthcare providers in the United States and abroad.

In 2010, Kimberly-Clark obtained FDA pre-market clearance for its AAMI Level 4 “Microcool” surgical gowns, complying with FDA’s requirement that surgical gowns demonstrate blood-borne pathogen resistance in critical zones, including the sleeve, by preventing fluids from penetrating the gown. DOJ alleged that, after Kimberly-Clark changed or modified the surgical gowns’ fabric, it obtained fraudulent test results as to whether the new version of the product constituted a significant change or modification such that a new premarket notification or 510(k) was required to be submitted to FDA. The results of the fraudulent testing showed that the new version of the gown was still compliant with the AAMI Level 4 requirements and applicable FDA standards. Thus, Kimberly-Clark declined to submit a new 510(k) for the new version of the product before bringing it to market and marketing the gowns as AAMI Level 4 compliant, or providing the highest level of protection against fluid and viruses. As the results of this testing were fabricated, Kimberly-Clark was alleged to have introduced $49 million worth of adulterated medical devices into commerce with an intent to defraud and mislead.

Although there was no evidence of patients experiencing physical harm as a result of the misbranding and adulteration of the gowns, DOJ stated that Kimberly-Clark’s actions defrauded FDA and endangered patients and medical professionals. The company has since ceased manufacturing the surgical gowns at issue. The deferred prosecution agreement (DPA) states the company’s $40.5 million payments will be disbursed as follows: $24.5 million to the U.S. Treasury for criminal monetary penalties; $3.9 million in profit forfeiture; and up to $12 million in victim compensation.

1. 3. Former Executives of Magellan Diagnostics, Inc.[10]

Three former corporate executives of Magellan Diagnostics, Inc. pled guilty and were sentenced in federal court on felony charge(s) of introduction of misbranded medical devices into interstate commerce under the FDCA as a part of their individual plea agreements to avoid jail time. The three executives, Amy Winslow (former CEO), Hossein Maleknia (former COO), and Reba Daoust (former Director of Quality Assurance and Regulatory Affairs) all received home detention in lieu of prison time and criminal fines of varying amounts.

Their individual criminal cases brought by DOJ are a continuation and result of the criminal investigation of their employer, whose alleged failure to notify FDA about serious malfunctions in its lead-testing medical devices resulted in inaccurately low level blood tests in children and adults. Magellan’s medical device products—LeadCare Ultra, LeadCare II, and LeadCare Plus—detected lead levels and lead poisoning in the blood of children and adults using either venous (i.e., blood draws through the arm) or fingerstick samples. Before launching its LeadCare II product, DOJ alleged that Magellan performed internal temperature and humidity tests that revealed differing blood lead levels from the same test sample based upon how long the blood-treatment reagent was left to incubate.

LeadCare II was predominately used to test fingerstick samples and accounted for more than half of all blood lead tests conducted in the United States from 2013 to 2017. The other two products, LeadCare Plus and LeadCare Ultra, predominantly were used to test venous samples.

According to the executives’ criminal indictments, Magellan applied for FDA pre-market clearance of its LeadCare Ultra device, which involved performance testing on lead present in blood samples. DOJ alleged that one of Magellan’s executives was informed about the failed results of the testing which showed a malfunction in the device likely to result in inaccurate test results before its submission to the FDA for clearance. Magellan did not notify FDA of the malfunction and the device was subsequently cleared. DOJ also alleged that after the product’s clearance, the other two executives were informed of the test results and the company conducted more tests which showed the same malfunction. The product was brought to market without notice to consumers or FDA of the existence of a malfunction. When the malfunction was discovered by consumers, the defendant executives approved a customer letter downplaying the nature, extent, risk, and frequency of the malfunction, and several months later, notified FDA of the malfunction in a materially false and misleading manner, according to DOJ. DOJ argued that the executives’ actions deliberately misled FDA and caused an estimated thousands of children and other patients to receive inaccurately low lead test results. DOJ stated that it will continue to hold individuals accountable for concealing known defects in products sold by their employer company which endanger public health and safety in order to maintain profit.

False Claims Act & Anti-Kickback Statute

Below is a review of some of the key FCA and AKS settlements between the food and drug industry and the government in 2025, including the first time a management consulting firm (McKinsey & Company Inc.) has been held criminally responsible for advice resulting in the commission of a crime by a client (Purdue Pharma LP).

In addition to negotiating the settlements detailed below, in July 2025 DOJ’s Civil Division and the Department for Health and Human Services (HHS) re-established the DOJ-HHS False Claims Act Working Group, jointly led by the HHS General Counsel, Chief Counsel to HHS Office of Inspector General (HHS-OIG), and the Deputy Assistant Attorney General of the Commercial Litigation Branch. The Working Group itself is comprised of leadership from the HHS Office of General Counsel, the Centers for Medicare & Medicaid Services Center for Program Integrity, the Office of Counsel to the HHS-OIG, and the DOJ’s Civil Division, as well as designees representing U.S. Attorneys’ Offices.[11]

The Working Group’s priority enforcement areas are: Medicare Advantage; drug, device or biologics pricing, including arrangements for discounts, rebates, service fees, and formulary placement and price reporting; barriers to patient access to care, including violations of network adequacy requirements; kickbacks related to drugs, medical devices, durable medical equipment, and other products paid for by federal healthcare programs; materially defective medical devices that impact patient safety; and manipulation of Electronic Health Records systems to drive inappropriate utilization of Medicare covered products and services. The Working Group will also focus on DOJ’s other previously-announced areas of FCA enforcement focus: combatting Diversity, Equity, and Inclusion programs, and gender transition-related healthcare.[12]

A. Management Consulting

1. McKinsey & Company Inc.[13]

In the first time a management consulting firm has been held criminally responsible for advice resulting in the commission of a crime by a client, McKinsey & Company Inc. (McKinsey), a global management consulting firm, agreed to pay $650 million to resolve a criminal and civil investigation into the firm’s advice to opioids manufacturer Purdue Pharma L.P. (Purdue) concerning the sales and marketing of Purdue’s extended-release opioid drug, OxyContin, including a 2013 engagement in which McKinsey advised on steps to “turbocharge” sales of OxyContin by, among other strategies, intensifying marketing to High Value Prescribers.

McKinsey agreed to pay a penalty of over $231 million, a forfeiture amount of over $93 million (reflecting all money it was paid by Purdue from 2004 to 2019) and a payment of $2 million to the Virginia Medicaid Fraud Control Unit to resolve the criminal allegations. McKinsey also entered into a civil settlement agreement to pay over $323 million to resolve its liability under the FCA for allegedly providing advice to Purdue Pharma L.P. that caused the submission of false and fraudulent claims to federal healthcare programs for medically unnecessary prescriptions of OxyContin, as well as allegedly failing to disclose to FDA conflicts of interest arising from McKinsey US’s concurrent work for Purdue and FDA. Additionally, Martin E. Elling, a former McKinsey senior partner who worked on Purdue matters, was sentenced to six months of incarceration, two years of supervised release, and a $4,000 fine after he pled guilty to knowingly destroying records, documents and tangible objects with the intent to impede, obstruct and influence the investigation.

Along with the civil settlement, McKinsey US entered into a five-year Corporate Integrity Agreement (CIA) with HHS-OIG, HHS-OIG’s first CIA with a management consulting firm, which contains novel obligations regarding risk assessment and quality control. First, the CIA requires McKinsey’s Compliance Committee to establish a robust risk evaluation process, evaluating engagement risks and providing quality oversight for certain client deliverables. Second, it requires McKinsey to establish a Quality Review Program to assess the quality of McKinsey’s advice to certain life sciences and health care clients with the dual goals of ensuring that McKinsey complies with applicable laws and does not provide or assist clients with plans, advice, or strategies that violate the law. HHS-OIG will select an independent Compliance Expert to review McKinsey’s systems and processes under the Quality Review Program and to review a sample of McKinsey client engagements, including the advice provided to those clients.

As part of the government’s resolution with McKinsey, the company entered into a five-year DPA in connection with a criminal information filed in the U.S. District Court for the Western District of Virginia against McKinsey’s U.S. subsidiary, McKinsey & Company Inc. United States (McKinsey U.S.). The information charges McKinsey U.S. with one felony count of knowingly destroying records, documents, and tangible objects with the intent to impede, obstruct, and influence the investigation and one misdemeanor count of knowingly and intentionally conspiring with Purdue and others to aid and abet the misbranding of prescription drugs, held for sale after shipment in interstate commerce, without valid prescriptions.

As part of the resolution, McKinsey agreed to implement a significant compliance program, including a system of policies and procedures designed to identify and assess high-risk client engagements. As part of this compliance program, McKinsey will implement new document retention procedures and training for all partners, officers, and employees who provide or implement advice to clients. This compliance program is in addition to the provisions negotiated between McKinsey and the Department in a concurrent resolution with McKinsey & Company Africa. McKinsey also agreed to not do any work related to the marketing, sale, promotion or distribution of controlled substances during the five-year term of the DPA.

B. Scientific Research

1. Dana-Farber Cancer Institute[14]

Dana-Farber Cancer Institute (Dana-Farber) agreed to pay $15 million to resolve allegations of violations of the FCA. Allegedly, Dana-Farber caused the submission of false claims to the National Institutes of Health (NIH) by falsely certifying compliance with grant terms and conditions, spending grant funds on unallowable expenses, and obtaining grants through false and misleading statements.

As part of the settlement, Dana-Farber admitted that its researchers used funds from six NIH grants to conduct research that resulted in 14 publications in scientific journals containing misrepresented and/or duplicated images and data. The publications reused images to represent different experimental conditions; duplicated images to represent different testing conditions, mice, and/or timepoints; or rotated, magnified, or stretched images. Further, Dana-Farber admitted that a supervising researcher failed to exercise sufficient oversight over these researchers, resulting in unallowable spending from those six NIH grants. Dana-Farber also admitted that another researcher received four NIH grants after submitting grant applications that discussed a journal article authored by the researcher but did not disclose that certain images and data in that article were misrepresented and/or duplicated.

1. 2. Athira Pharma Inc.[15]

Athira Pharma Inc. (Athira), a late clinical stage pharmaceutical development company, agreed to pay $4,068,698 to resolve allegations of violations of the FCA. Allegedly, between January 1, 2016, and June 20, 2021, Athira failed to report allegations that its former CEO, Leen Kawas, falsified and manipulated scientific images in her doctoral dissertation and in published research papers that were referenced in several grant applications submitted to NIH, including in a grant that NIH funded in 2019. Specifically, Athira violated its regulatory obligations to disclose the allegations to NIH in grant applications and Research Progress Performance Reports, and to disclose them to the Department of Health and Human Services Office of Research Integrity in Small Business Organization Statements, Institutional Assurances, or Annual Reports on Possible Research Misconduct.

C. Drugs

1.Biohaven Pharmaceutical Holding Company Ltd.[16]

On behalf of its wholly-owned subsidiary Biohaven Pharmaceutical Holding Company Ltd. (Biohaven), pharmaceutical company Pfizer Inc. (Pfizer) agreed to pay $59,746,277 to resolve allegations of violations of the AKS and FCA. Allegedly, prior to Pfizer’s acquisition of the company, Biohaven knowingly caused the submission of false claims to Medicare and other federal health care programs by paying kickbacks to health care providers to induce prescriptions of Biohaven’s migraine drug Nurtec ODT.

Allegedly, from March 1, 2020, through Sept. 30, 2022 (after which Pfizer acquired Biohaven and terminated the programs), Biohaven paid improper remuneration such as speaker honoraria and meals at high end restaurants to health care professionals to induce them to prescribe Nurtec ODT in violation of the AKS. Biohaven selected certain health care providers to be part of the Nurtec speaker bureau and provided them paid speaking opportunities with the intent that the speaker honoraria and meals would induce them to prescribe Nurtec ODT. Certain prescribers who attended multiple programs on the same topic received no educational benefit from attending repeat programs and certain Biohaven speaker programs were attended by individuals with no educational need to attend, such as the speakers’ spouses, family members, or friends, or colleagues from the speakers’ own medical practice.

1. 2. Walgreens Boots Alliance, Walgreen Co., and various subsidiaries[17]

Walgreens Boots Alliance, Walgreen Co., and various subsidiaries (collectively, Walgreens) agreed to pay $300 million to resolve allegations of violations of the FCA. Walgreens will owe an additional $50 million if the company is sold, merged, or transferred prior to fiscal year 2032.

Allegedly, from around August 2012 through March 1, 2023, Walgreens illegally filled millions of invalid prescription for opioids and other controlled substances—prescriptions for excessive quantities of opioids, opioid prescriptions filled significantly early, and prescriptions for the especially dangerous and abused combination of three drugs known as a “trinity.” Walgreens pharmacists filled these prescriptions despite clear red flags indicating a high likelihood that the prescriptions were invalid because they lacked a legitimate medical purpose or were not issued in the usual course of professional practice. Walgreens pressured its pharmacists to fill prescriptions quickly and without taking the time needed to confirm that each prescription was lawful. Walgreens’s compliance officials also allegedly ignored substantial evidence that its stores were dispensing unlawful prescriptions and even intentionally deprived its own pharmacists of crucial information, including by refusing to share internal data regarding prescribers with pharmacists and preventing pharmacists from warning one another about certain problematic prescribers.

In addition to the monetary payments, Walgreens entered into agreements with DEA and HHS-OIG to address its future obligations in dispensing controlled substances. Walgreens and DEA entered into a memorandum of agreement that requires the company to implement and maintain certain compliance measures for the next seven years. Walgreens also entered into a five-year CIA with HHS-OIG, which further requires Walgreens to establish and maintain a compliance program that includes written policies and procedures, training, board oversight, and periodic reporting to HHS-OIG related to Walgreens’s dispensing of controlled substances.

3. Gilead Sciences Inc.[18]

Gilead Sciences, Inc. (Gilead) agreed to pay $202 million to resolve allegations of violations of the AKS and FCA and made extensive factual admissions regarding the company’s conduct. Gilead allegedly offered and paid kickbacks in the form of honoraria payments, meals, and travel expenses to healthcare practitioners who spoke at or attended Gilead speaker events to induce them to prescribe its antiretroviral HIV medications.

As part of its marketing efforts and to increase sales, Gilead conducted events known as “HIV Speaker Programs” at which a healthcare provider involved in the treatment of HIV was engaged to present a slide deck (prepared by Gilead) and facilitate discussion about one of the drugs or a topic concerning HIV to other healthcare providers involved in the treatment of HIV, with the HIV Speaker Programs often being held in the evening at restaurants.

From January 2011 to November 2017, Gilead conducted HIV Speaker Programs in order to promote and increase the sales of its HIV drugs. While the HIV Speaker Programs were supposed to be educational in nature with the cost of any meals provided to be modest, Gilead’s HIV Speaker Programs provided kickbacks to healthcare providers by:

• holding HIV Speaker Programs at high-end restaurants that were inappropriate for educational events;
• allowing attendees to attend HIV Speaker Programs on the exact same topic again and again (over 250 prescribers of Gilead’s HIV drugs attended HIV Speaker Programs on the same topic three times or more within a six-month period, and over 80 attended five or more on the same topic within a six-month period) and, thereby, obtain free lavish meals for events that held minimal educational value for them; and
• paying for HIV Speakers to travel to speak at desirable destinations—at times at the HIV Speaker’s request.

Further, Gilead’s compliance program failed to prevent these improper practices, even though Gilead knew that it had to comply with the AKS and the company’s own data should have put Gilead on notice of many of these abuses.

D. Wound Care

1. Alexandra Gehrke, Jeffrey King, Apex Medical LLC[19]

The owners of several Arizona wound graft companies, Alexandra Gehrke and her husband, Jeffrey King, pled guilty to conspiracy to commit health care fraud and wire fraud and were sentenced to 15.5 and 14 years in prison, respectively, for causing over $1.2 billion of false and fraudulent claims to be submitted to Medicare and other health insurance programs. Gehrke and King were additionally ordered to pay restitution and to forfeit fraudulent proceeds obtained personally and through companies they owned and controlled: Gehrke was ordered to pay $614,945,420 in restitution and to forfeit $279,912,916 in fraudulent proceeds, King was ordered to pay $605,690,110 in restitution and to forfeit $130,813,658 in fraudulent proceeds.

In addition to the criminal case, Gehrke and the wound graft marketing company she owned, Apex Medical LLC, agreed to pay $279,912,916, and King agreed to pay $30 million, related to their respective civil liability under the FCA, resolving allegations that they knowingly submitted false claims to Medicare and other federal health care programs for medically unnecessary wound allografts, received illegal kickbacks from a wholesale wound allograft distributor in exchange for orders, purchases, and referrals and paid illegal kickbacks to other parties.

According to court documents, Gehrke and King orchestrated a large-scale wound-care scheme from 2022 through 2024. Gehrke solely owned and operated two companies that contracted with medically untrained “sales representatives” to find elderly Medicare beneficiaries throughout Arizona with wounds of any kind. Once the sales representatives identified these patients, many of whom were in hospice care, Gehrke directed the sales representatives to order expensive bioengineered skin substitutes—amniotic membrane allografts made from human placental tissue—to be placed on the wounds. To maximize profits, Gehrke required the sales representatives to order only the largest sizes of grafts available, even if the sizes of grafts or the use of grafts as treatment were not medically appropriate or reasonable.

Gehrke referred the patients identified by the sales representatives first to a company she owned, and later in the scheme to a company co-owned by King. Both of these companies were enrolled as Medicare providers and could submit claims to Medicare. Through these companies, Gehrke and King purchased the grafts from a wholesale graft distributor. They also contracted with nurse practitioners to apply the grafts and billed Medicare and other health insurers for the grafts applied. Gehrke and King instructed the nurse practitioners to suspend their medical judgment and apply whatever quantities and sizes of grafts were ordered by the medically untrained sales representatives, regardless of medical necessity.

The financial incentive for the sales representatives to order large numbers and sizes of allografts, combined with Gehrke and King’s requirement that nurse practitioners apply all grafts ordered, resulted in large grafts applied to small wounds, several grafts applied to single wounds, grafts applied to non-existent wounds and grafts applied to terminally ill patients receiving palliative care, some of whom died within days or the same day of the allograft application.

2. Dr. Ameet Vohra and his companies, including Vohra Wound Physicians[20]

Dr. Ameet Vohra and his companies, including Vohra Wound Physicians Management LLC (Vohra), agreed to pay $45 million to resolve allegations of FCA violations. Dr. Vohra and his companies allegedly knowingly caused the submission of claims to Medicare for medically unnecessary surgical procedures, for more lucrative surgical procedures when only routine non-surgical wound management had been done, and for evaluation and management services that were not billable under Medicare coverage and coding rules.

Dr. Vohra allegedly orchestrated and implemented a scheme, via his senior management team, in which Vohra pressured, trained, and provided financial incentives for Vohra physicians to perform wound debridement procedures during as many patient visits as possible regardless of the patients’ needs, while having programmed its electronic health record and billing software to ensure that Medicare was always billed for the higher-reimbursed surgical excisional procedure and to create false medical record documentation to support the scheme.

In connection with the settlement, Vohra will enter into a five-year CIA with HHS-OIG, under which Vohra must develop and maintain a compliance program, implement a risk assessment process, and hire an independent review organization to review its claims and health information technology systems. The CIA also requires monitoring of Vohra’s operations and obligates company executives and owners to certify compliance annually with the terms of the CIA.

E. Medical Devices

1. Semler Scientific Inc. and Bard Peripheral Vascular Inc.[21]

Semler Scientific Inc. (Semler) and its former distributor, Bard Peripheral Vascular Inc., and related companies (Bard) agreed to pay nearly $37 million to resolve allegations of FCA violations: $29.75 million from Semler and $7.2 million from Bard. The parties allegedly knowingly caused, and conspired to cause, the submission of false claims to Medicare for photoplethysmography tests performed using the FloChec and QuantaFlo devices in connection with the diagnosis of peripheral arterial disease (PAD).

Providers traditionally diagnose PAD by conducting a test called an ankle brachial index (ABI) to estimate the severity of the blood vessel blockage in a patient’s limbs. To qualify for Medicare reimbursement, PAD testing must include an ABI test plus certain additional testing; Medicare does not cover noninvasive vascular tests that use photoelectric plethysmography, which uses a light sensor to detect changes in blood volume. From approximately 2010 through 2024, Semler manufactured, marketed, and distributed the FloChec and QuantaFlo devices to customers throughout the United States for use in connection with the diagnosis of PAD. Both devices use a light sensor to detect changes in blood volume. Additionally, when FDA cleared FloChec and QuantaFlo, the agency told Semler that the devices did not perform an ABI and could not be called a “digital ABI.”

Semler and Bard allegedly falsely claimed that tests conducted using the FloChec and QuantaFlo devices were reimbursable by Medicare and caused healthcare providers to submit false claims to Medicare, while knowing the tests were not reimbursable because the devices do not perform an ABI and because the devices use photoelectric plethysmography. Even after Semler received concerns from third parties about reimbursement, Semler allegedly continued to market the devices as reimbursable by Medicare.

Bard served as Semler’s distributor from 2012 through 2022. As part of the settlement, Bard admitted certain allegations and received cooperation credit under Justice Department guidelines. In addition to the civil settlement, Semler entered into a five-year CIA with HHS-OIG, which obligates Semler to undertake substantial internal compliance reforms.

2. Diopsys Inc.[22]

Diopsys Inc. (Diopsys) agreed to pay up to $14.25 million to resolve allegations of FCA and various state law violations with guaranteed payments of $1,225,000 and contingent payments of up to $13,025,000. Diopsys allegedly knowingly submitted or caused others to submit false claims for payment to Medicare and Medicaid in connection with certain vision testing services.

Diopsys’ NOVA device is an electrophysiological device that FDA cleared for visual evoked potential testing. Allegedly, from January 1, 2015, through December 31, 2021, Diopsys caused healthcare providers to submit false claims to Medicare and Medicaid for services in which the NOVA device was utilized for medically unnecessary uses, specifically electroretinography vision testing, a substantially different vision test for which the NOVA device lacked FDA clearance. Diopsys additionally allegedly made substantial changes to the NOVA device that it never submitted to FDA for clearance or approval despite knowing that such a submission was required.

Conclusion

These settlements and criminal enforcement cases illustrate the government’s commitment to combatting adulteration, misbranding, and fraud in the food and drug space, including healthcare services. Especially given the current administration’s focus on combatting government waste and fraud, and the re-establishment of the DOJ-HHS False Claims Working Group, we expect coming years to hold many more high-profile cases and resulting big-ticket settlements.

*   Helen K. Ryan is an associate at Kleinfeld, Kaplan and Becker. In her practice, Helen provides practically actionable advice to clients on regulatory matters before the U.S. Food and Drug Administration and related federal, state, and local agencies, and has extensive experience advising clients in the drug, biologic, and medical device industries. Before joining Kleinfeld, Kaplan & Becker, Helen worked as a life sciences regulatory and compliance associate at an AM 100 firm in Washington, D.C. There, she assisted clients with navigating FDA, DEA, and related regulatory frameworks applicable to drug and medical device products. Helen also briefly served as a regulatory counsel within FDA’s Office of Regulatory Policy within the Center for Drug Evaluation and Research (CDER). Laura K. Schwendeman is an associate at Kleinfeld, Kaplan and Becker. In her practice, Laura bridges the gap between complex regulations and day-to-day business realities on behalf of clients in a variety of industries regulated by FDA and other federal, state, and local agencies. Prior to joining Kleinfeld, Kaplan & Becker, Laura served as an attorney advisor in the third-largest administrative law judge (ALJ) office in the federal government. There, Laura supported ALJs in adjudications of matters arising under 80+ different federal statutes, Executive Orders, and regulations.

[1]   In this chapter, the term “settlements” is used as an umbrella term and includes both true settlements and other non-litigated resolutions such as criminal plea bargains.

[2]   The Department of Justice Creates New Civil Division Enforcement & Affirmative Litigation Branch, U.S. Dep’t of Just. (Sept. 25, 2025), https://www.justice.gov/opa/pr/department-justice-creates-new-civil-division-enforcement-affirmative-litigation-branch.

[3]   Id.

[4]   Health & Safety Unit, U.S. Dep’t of Just., https://www.justice.gov/criminal/criminal-fraud/health-safety-unit (Dec. 2, 2025); see Branching Off: The Restructing of the DOJ’s Consumer Protection Branch and What it Means for Companies, Mayer Brown (Jan. 16, 2026), https://www.‌hoganlovells.com/en/publications/branching-off-the-restructuring-of-the-dojs-consumer-protection-branch-and-what-it-means.

[5]   Health & Safety Unit, U.S. Dep’t of Just., https://www.justice.gov/criminal/criminal-fraud/health-safety-unit (Dec. 2, 2025)..

[6]   Online Seller of Infant Formula Pleads Guilty to Smuggling and Violating FDA Prior Notice Requirements, U.S. Dep’t of Just. (Nov. 21, 2025), https://www.justice.gov/opa/pr/online-seller-infant-formula-pleads-guilty-smuggling-and-violating-fda-prior-notice.

[7]   Court Enjoins Arizona Animal Drug Manufacturer from Distributing Unapproved Drugs, U.S. Dep’t of Just. (Apr. 29, 2025), https://www.justice.gov/opa/pr/court-enjoins-arizona-animal-drug-manufacturer-distributing-unapproved-drugs; United States v. AniCell Biotech LLC, et al., No. CV-23-01803-PHX-SPL, Order, ECF No. 41 (D. Ariz. Apr. 17, 2025), https://anicellbiotech.com/wp-content/uploads/2025/04/AniCell-Order-granting-Motion-to-Approve-Concent-Decree-041725.pdf?x49 210.

[8]   Aesculap Implant Systems Agrees to Pay $38.5M to Resolve False Claims Act Allegations Related to Knee Implant Failures and Enters into a Non-Prosecution Agreement Related to the Introduction of Two Adulterated Medical Devices into Interstate Commerce, U.S. Dep’t of Just. (Nov. 17, 2025), https://‌www.‌justice.gov/opa/pr/aesculap-implant-systems-agrees-pay-385m-resolve-false-claims-act-allegations-related-knee; B. Braun Unit Inks $38.5M Deal To End FCA Knee Implant Case, Law360 (Nov. 17, 2025), https://www.law360.com/articles/2412096/b-braun-unit-inks-38-5m-deal-to-end-fca-knee-implant-case; Med Device Employee Gets 1 Year For Forging FDA Clearance, Law360 (Jan. 24, 2024), https://www.law360.com/articles/1789498/med-device-employee-gets-1-year-for-forging-fda-clearance.

[9]   Kimberly-Clark Corporation to Pay Up to $40M to Resolve Criminal Charge Related to the Sale of Adulterated MicroCool Surgical Gowns, U.S. Dep’t of Just. (Aug. 28, 2025), https://www.justice.gov/opa/pr/kimberly-clark-corporation-pay-40m-resolve-criminal-charge-related-sale-adulterated; United States v. Kimberly-Clark Corp., No. 3:25-cr-00399-N, Order, ECF No. 3 (N.D. Tex. Aug. 28, 2025), https://assets.law360news.com/2382000/2382100/https-ecf-txnd-uscourts-gov-doc1-177117954446.pdf.

[10] Three Former Executives for Magellan Diagnostics Sentenced for False Statements and FDCA Violations, U.S. Dep’t of Just. (Nov. 24, 2025), (https://www.justice.gov/usao-ma/pr/three-former-executives-magellan-diagnostics-sentenced-false-statements-and-fdca; United States v. Amy Winslow, Hossein Maleknia, and Reba Daoust, U.S. Dep’t of Just. (Mar. 11, 2025), https://www.justice.gov/usao-ma/victim-and-witness-assistance-program/united-states-v-amy-winslow-hossein-maleknia-and-reba-daoust; 2nd Ex-Magellan Exec Avoids Jail Over Faulty Lead Tests, Law360 (Oct. 30, 2025), https://www.law360.com/articles/2405893/2nd-ex-magellan-exec-avoids-jail-over-faulty-lead-tests; United States v. Winslow, et. al., No. 1:23-cr-10094-PBS, Order No. 1 (D. Mass. Apr. 4, 2023), https://www.justice.gov/usao-ma/file/1580646/dl?inline.

[11] DOJ-HHS False Claims Act Working Group, U.S. Dep’t of Just. (July 2, 2025), https://www.justice.gov/opa/pr/doj-hhs-false-claims-act-working-group.

[12] Memorandum from Assistant Attorney General Brett A. Shumate, Civil Division, U.S. Dep’t of Just. to All Civil Division Employees, Civil Division Enforcement Priorities (June 11, 2025), https://www.justice.gov/civil/media/1404046/dl?inline.

[13] Justice Department Announces Resolution of Criminal and Civil Investigations into McKinsey & Company’s Work with Purdue Pharma L.P.; Former McKinsey Senior Partner Charged with Obstruction of Justice, U.S. Dep’t of Just. (Dec. 13, 2024), https://www.justice.gov/archives/opa/pr/justice-department-announces-resolution-criminal-and-civil-investigations-mckinsey-companys; Former Senior Partner at McKinsey & Company Sentenced, U.S. Dep’t of Just. (May 23, 2025), https://www.justice.gov/usao-wdva/pr/former-senior-partner-mckinsey-company-sentenced.

[14] Dana-Farber Cancer Institute Agrees to Pay $15M to Settle Fraud Allegations Related to Scientific Research Grants, U.S. Dep’t of Just. (Dec. 16, 2025), https://www.justice.gov/opa/pr/dana-farber-cancer-institute-agrees-pay-15m-settle-fraud-allegations-related-scientific.

[15] Athira Pharma Inc. Agrees to Pay $4M to Settle False Claims Act Allegations Related to Scientific Research Misconduct, U.S. Dep’t of Just. (Jan. 6, 2025), https://www.justice.gov/archives/opa/pr/athira-pharma-inc-agrees-pay-4m-settle-false-claims-act-allegations-related-scientific.

[16] Pfizer Agrees to Pay Nearly 60M to Resolve False Claims Allegations Relating to Improper Physician Payments by Subsidiary, U.S. Dep’t of Just. (Jan. 24, 2025), https:‌//‌www.‌justice.‌gov/‌opa/pr/pfizer-agrees-pay-nearly-60m-resolve-false-claims-allegations-relating-improper-physician.

[17] Walgreens Agrees to Pay Up to $350M for Illegally Filling Unlawful Opioid Prescriptions and for Submitting False Claims to the Federal Government, U.S. Dep’t of Just. (Apr. 21, 2025), https://www.justice.gov/opa/pr/walgreens-agrees-pay-350m-illegally-filling-unlawful-opioid-prescriptions-and-submitting.

[18] U.S. Attorney Announces $202 Million Settlement With Gilead Sciences For Using Speaker Programs To Pay Kickbacks To Doctors To Induce Them To Prescribe Gilead’s Drugs, U.S. Dep’t of Just. (Apr. 29, 2025), https://www.justice.gov/usao-sdny/pr/us-attorney-announces-202-million-settlement-gilead-sciences-using-speaker-programs.

[19] Wound Graft Company Owners Sentenced for $1.2B Health Care Fraud and Agree to Pay $309M to Resolve Civil Liability Under the False Claims Act, U.S. Dep’t of Just. (Dec. 12, 2025), https://www.justice.gov/opa/pr/wound-graft-company-owners-sentenced-12b-health-care-fraud-and-agree-pay-309m-resolve-civil.

[20] Vohra Wound Physicians and its Owner Agree to Pay $45M to Settle Fraud Allegations of Overbilling for Wound Care Services, U.S. Dep’t of Just. (Nov. 21, 2025), https://‌www.‌justice.gov/opa/pr/vohra-wound-physicians-and-its-owner-agree-pay-45m-settle-fraud-allegations-overbilling.

[21] Semler Scientific Inc. and Bard Peripheral Vascular Inc. to Pay Nearly $37M to Resolve False Claims Act Allegations Relating to FloChec and QuantaFlo Devices, U.S. Dep’t of Just. (Sept. 26, 2025), https://www.justice.gov/opa/pr/semler-scientific-inc-and-bard-peripheral-vascular-inc-pay-nearly-37m-resolve-false-claims.

[22] Diopsys Inc. Agrees to Pay up to $14.25 Million to Resolve Alleged Federal False Claims Act and State Law Violations Relating to Vision Testing, U.S. Dep’t of Just. (Mar. 28, 2025), https://www.justice.gov/opa/pr/diopsys-inc-agrees-pay-1425-million-resolve-alleged-federal-false-claims-act-and-state-law.