Knee Implant Manufacturer Agrees to $8 Million False Claims Act Settlement

On September 16, 2025, the United States Attorney’s Office for the District of Maryland announced that knee implant manufacturer Exactech Inc. had agreed to pay $8 million to resolve allegations that it violated the False Claims Act (FCA). The press release noted that the $8 million settlement was the result of Exactech’s financial condition, suggesting that Exactech’s financial liability was likely much greater than the settlement amount.

Specifically, the DOJ alleged that Exactech violated the FCA by marketing a total-knee replacement system that contained components that Exactech knew failed prematurely at higher than acceptable rates. Accordingly, the DOJ alleged, “it was not reasonable and necessary for use during total-knee replacement surgeries performed on Medicare, Medicaid, and VA beneficiaries.”

The settlement was the result of two separate qui tam whistleblower lawsuits. The first one was filed in the Northern District of Alabama by three individuals including a physician who, according to his public Linkedin profile, works for Johnson & Johnson, serving as the Director of Medical Affairs for DePuy. The Alabama whistleblowers will receive a combined total of $1.32 million. The second qui tam was filed by a Maryland-based orthopedic surgeon. He will receive over $565,000.

Any claim submitted to a federal health care program must be for an item or service that is “reasonable and necessary.” As this settlement illustrates, medical device manufacturers and others face significant liability – both for common law product liability and under the FCA – for marketing products that it knows or should know is somehow substandard or defective.

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The attorneys at Chilivis Grubman represent businesses and individuals in connection with False Claims Act investigations and litigation. If you need assistance with such a matter, contact us today.