Kimberly-Clark Corporation to Pay Up to $40M to Resolve Criminal Charge Related to the Sale of Adulterated MicroCool Surgical Gowns

Note: This press release has been updated to more accurately reflect the terms of the DPA.

Kimberly-Clark Corporation (Kimberly-Clark), a U.S.-based multinational consumer goods and personal care company, has agreed to pay up to $40.4 million to resolve a criminal charge relating to the company’s sale of adulterated MicroCool surgical gowns.

“Kimberly-Clark betrayed the trust placed in it by consumers and healthcare providers when it chose to defraud the FDA and bring adulterated surgical gowns to market for its own financial gain,” said Acting Assistant Attorney General Matthew R. Galeotti of the Justice Department’s Criminal Division. “Today’s resolution demonstrates the Criminal Division’s unwavering commitment to holding corporations accountable when they threaten the integrity of our healthcare system. This resolution, in which the company has agreed to pay up to $40 million, sends a clear message that those who endanger patients and medical professionals will face significant criminal penalties.”

“Companies that sell medical products cannot misrepresent the safety and quality of those products,” said Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division. “The Department of Justice will continue to vigorously enforce laws that protect patients and medical professionals.”

A criminal information filed today in U.S. District Court in the Northern District of Texas charges Kimberly-Clark with one count of introducing adulterated surgical gowns into interstate commerce with an intent to defraud and mislead. According to court filings, a Kimberly-Clark employee conducted fraudulent testing on Kimberly-Clark’s MicroCool gowns to avoid having to submit a premarket notification to the U.S. Food and Drug Administration (FDA) after Kimberly-Clark made a change to the gowns. A premarket notification is meant to show FDA that a medical device is as safe and effective as an already legally marketed device. Based on the fraudulent testing, Kimberly-Clark sold the gowns after the change without a new premarket notification, marketing the gowns as providing the highest level of protection against fluid and viruses.

Under the terms of a deferred prosecution agreement filed with the criminal information, Kimberly-Clark will pay up to $40,400,000, which consists of a monetary penalty of $24,500,000, a forfeiture of profits of $3,900,000, and up to $12,000,000 in victim compensation. The deferred prosecution agreement resolves a criminal investigation into Kimberly-Clark’s sale of its adulterated MicroCool surgical gowns under the Federal Food, Drug, and Cosmetic Act (FDCA).

According to court documents, surgical gowns sold in the United States are subject to regulation by the FDA, which recognizes a system of classification set forth by the American National Standards Institute (ANSI) and the Association for the Advancement of Medical Instrumentation (AAMI) — known as the ANSI/AAMI PB70 standard. The ANSI/AAMI PB70 standard was first established in 2003 and revised to be more rigorous in 2012. Under the standard, the highest protection level for surgical gowns — AAMI Level 4 — is reserved for gowns intended to be used in surgeries and other high-risk medical procedures on patients suspected of having infectious diseases. To establish compliance with the standard, a surgical gown needs to demonstrate blood-borne pathogen resistance in each of several critical zones, including the sleeve, by preventing fluids from penetrating the gown.

As part of the deferred prosecution agreement, Kimberly-Clark admitted that, with an intent to defraud and mislead and to avoid filing a 510(k) premarket notification with FDA for its MicroCool gowns, an employee of Kimberly-Clark directed the preparation of test samples for the surgical gowns that did not meet the requirements of AAMI Level 4 testing. Kimberly-Clark further admitted that between late 2013 and late 2014, it sold millions of adulterated MicroCool surgical gowns labeled as AAMI Level 4 after the fraudulent testing and without a new 510(k) FDA premarket notification. In total, Kimberly-Clark sold approximately $49,000,000 worth of adulterated MicroCool gowns to customers in the United States and abroad.

The deferred prosecution agreement requires Kimberly-Clark to, among other obligations, provide ongoing cooperation with and disclosures to the Justice Department, implement a compliance and ethics program, and report to the Justice Department regarding remediation and implementation of these compliance measures.

The government reached this resolution with Kimberly-Clark based on a number of factors, including the nature and seriousness of the offense conduct and that Kimberly-Clark ceased manufacturing the surgical gowns at issue in this matter.  Kimberly-Clark did not voluntarily and timely self-disclose the conduct to the department, but did receive full credit for its cooperation with the department’s investigation, which included  meeting requests from the government promptly, making regular factual presentations and updates to the government, and producing extensive documentation to the Offices, including documents located in foreign jurisdictions.  

The criminal case was investigated by the FDA’s Office of Criminal Investigations.

Trial Attorneys David Gunn, Max Goldman, and Amanda Kelly of the Civil Division’s Consumer Protection Branch, and Jacob Foster, Acting Chief of the Criminal Division’s Health Care Fraud Unit, prosecuted the case.

The Criminal Division’s Fraud Section is responsible for investigating and prosecuting health care fraud (HCF) matters. Additional information about the Justice Department’s HCF enforcement efforts can be found at https://www.justice.gov/criminal/criminal-fraud/health-care-fraud-unit.