B. Braun to Pay $38.5M in DOJ Settlement Over Allegedly Faulty Knee Implant and False Claims

B. Braun to Pay $38.5M in DOJ Settlement Over Allegedly Faulty Knee Implant, False Claims, and Forged FDA Documents

The U.S. Department of Justice (DOJ) has announced a $38.5 million settlement with Aesculap Implant Systems, a U.S. subsidiary of German medtech conglomerate B. Braun Melsungen AG, resolving allegations that the company knowingly sold a knee implant prone to early failure and, in doing so, caused the submission of false claims to Medicare and Medicaid. The settlement effectively closes out years-long scrutiny into the VEGA System knee replacement device, while also bringing to an end a related inquiry into alleged forged FDA authorization documents.

The resolution comes roughly a year after Aesculap voluntarily halted U.S. sales of the VEGA knee system and its associated product line a device that prosecutors say exposed patients to early failure risk and, in turn, triggered surgically intensive and costly revision procedures reimbursed by federal healthcare programs.

What You Need To Know

DOJ announces a $38.5M settlement with B. Braun subsidiary Aesculap over the allegedly faulty VEGA knee implant.
Government claimed early device failure triggered false Medicare and Medicaid claims for revision surgeries.
DOJ also resolved a forged FDA clearance document issue through a non-prosecution agreement.
B. Braun denies wrongdoing but welcomes closure of the long-running investigations.

A Knee Implant With Known Risks, DOJ Says

According to the DOJ’s announcement, Aesculap allegedly continued selling the VEGA System knee implant despite knowing the device had a “propensity to prematurely fail.” Because Medicare and Medicaid ultimately paid claims for revision surgeries tied to those failures, the government argued that the company effectively passed the financial burden of a flawed device onto taxpayers.

“A company that knows its product has a propensity to prematurely fail must not mislead doctors or government regulators,” said U.S. Attorney David Metcalf of the Eastern District of Pennsylvania. “Federal programs should not be forced to pay for devices that carry undue risk and may require painful, expensive corrective surgeries.”

The allegations reflect broader issues that have increasingly drawn DOJ and FDA attention in medtech, inadequate device performance data, internal knowledge of failure modes, and insufficient transparency in post-market risk reporting.

The settlement stems from civil claims that the device’s early failure rate created conditions in which Aesculap caused clinicians and hospitals to unknowingly submit false claims for revision surgeries to federal payers.

The VEGA System was ultimately pulled from the U.S. market about a year before the settlement, signaling either a post-market risk recognition by the company or a pre-emptive compliance step as investigations progressed.

While the settlement resolves civil liabilities, the company does not admit wrongdoing as part of the agreement.

Forged FDA Clearance Documents

The DOJ’s announcement also addressed a linked allegation involving two additional devices that were allegedly marketed without FDA clearance due to forged federal authorization documents. These documents were fraudulently created by a former employee, according to the DOJ.

Because the misconduct was attributed to an individual rather than systemic corporate intent, prosecutors opted for a nonprosecution agreement, declining criminal charges against the company.

This outcome underscores how DOJ increasingly differentiates between corporate negligence and individual criminality while still using civil enforcement mechanisms to penalize patient or payer harm.

In a statement, B. Braun’s U.S. general counsel Christiana Jacxsens welcomed the settlement as overdue closure, noting that the company is “pleased to resolve these longstanding matters.”