In recent years, private investors – primarily, but not limited to, private equity firms with either majority or minority investment stakes in life sciences portfolio companies – have been subject to increased government enforcement scrutiny under the False Claims Act (FCA). In particular, whistleblowers and the U.S. Department of Justice (DOJ) increasingly assert claims against private investors relating to alleged fraud and abuse violations performed by their portfolio companies.
“Our enforcement efforts may also include, in appropriate cases, private equity firms that sometimes invest in companies…. When a private equity firm invests in a company in a highly regulated space like health care or the life sciences, the firm should be aware of laws and regulations designed to prevent fraud…. Where a private equity firm knowingly engages in fraud…we will hold it accountable.”
––Former Principal Deputy Assistant Attorney General, DOJ Civil Division (June 2020)
Although not specific to medtech portfolio companies, at least presently, this enforcement trend is an important one for the medtech industry to follow, especially given the tremendously vital role private investors can play in supporting medtech companies of all sizes and, consequently, promoting the advancement of medtech innovation, patient access to life-saving technologies, and improved health outcomes.
Given investors’ vital role in medtech, AdvaMed developed tools and resources to help...
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