A medical product manufacturer has agreed to pay $14.5 million to settle claims that it violated the Trade Agreements Act and the Price Reduction Clause in its business dealings with the Department of Veterans Affairs.
The settlement agreement with Coloplast was announced on Dec. 12 by U.S. Attorney Matthew M. Graves and VA Inspector General Michael J. Missal.
“The United States government expects its business partners to act in good faith and follow the rules they agreed to follow,” said Graves in a release. “We cannot overlook the great potential for harm when a company provides products from non-compliant countries.”
Coloplast self-disclosed that it misapplied the Trade Agreements Act substantial transformation standard, which resulted in it reporting incorrect countries of origin for several Coloplast-manufactured products. In addition, some products remained on the contract after switching manufacturing locations to nondesignated countries.
Coloplast also self-reported that it misapplied the Price Reductions Clause by failing to provide the government with discounts pursuant to the terms of the contract. This failure led to overbilling the United States for certain medical and pharmaceutical products sold to the United States.
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“This settlement is significant in both its monetary value and in the message it sends to other corporations who wish to do business with VA — our nation’s veterans deserve the highest quality products, at the best possible prices available, and that comply with all applicable laws and regulations,” said Missal.
According to the release, the claims alleged are allegations only and there has been no determination of liability.
Reach Julia LeDoux at Julia@connectingvets.com.
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