Device Companies Will Be Under FCPA Spotlight, Experts Say

Medical device companies can expect to be increasingly under the gun in Foreign Corrupt Practices Act (FCPA) investigations, experts warn.

Although the focus of these investigations has been mostly on pharmaceutical companies, medical devicemakers have increasingly found themselves the subject of “sweep cases,” where the SEC “checks the tires of industries,” Michael Horowitz, partner at law firm Cadwalader, Wickersham & Taft, said.

James Ravitz, a partner in Arent Fox’s healthcare practice group, agreed that as the device industry becomes more global, FCPA investigations will increase. He said it will be interesting to see whether these will be stand-alone actions or if they will be combined with other investigations.

“For large device companies with global operations, I think we’re going to see more cases where FCPA investigations are added as a cause of action to other investigations,” Ravitz said.

For example, shortly after Stryker resolved a Department of Justice investigation into its consulting practices — part of an industrywide investigation of orthopedic firms — the company announced an SEC inquiry and subpoena regarding possible FCPA violations.