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FOR IMMEDIATE RELEASE
Wednesday, July 6, 2016

New Jersey Medical Device Manufacturer Admits Selling Contaminated Ultrasound Gel; Court Orders Permanent Injunction

Pharmaceutical Innovations Inc., based in Newark, New Jersey, pleaded guilty today to criminal charges and resolved a civil lawsuit arising from the company’s distribution of ultrasound gel contaminated with bacteria, the Department of Justice announced.  The devices at issue are gels that doctors and hospitals use to take ultrasound scans, sonograms, EKGs and similar procedures.

Pharmaceutical Innovations Inc. pleaded guilty before U.S. District Court Judge Esther Salas in Newark federal court to an information charging it with two misdemeanor counts of introducing adulterated medical devices into interstate commerce. In addition to placing the company on two years of probation, Judge Salas ordered the company to pay a criminal fine of $50,000 and to forfeit an additional $50,000 – the approximate value of the adulterated gel.

In a related civil settlement, which was also resolved today,  Pharmaceutical Innovations agreed to the forfeiture and destruction of particular gel products that tested exceptionally high for infectious bacteria and agreed to a permanent injunction that requires independent experts and auditors to conduct regular inspections and certifications at the company’s expense.

“The sale of adulterated medical devices puts patients at great risk,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “Device manufacturers that fail to comply with good manufacturing practices, thereby threatening patient safety, will be held accountable.”

“Pharmaceutical Innovations shipped defective products that exposed hospital patients to dangerous bacterial contamination,” said U.S. Attorney Paul J. Fishman for the District of New Jersey.  “Today’s plea agreement and civil settlement require Pharmaceutical Innovations to accept responsibility for the contamination and take the necessary steps to prevent it from happening again.”

According to documents filed in the case and statements made in court:

Doctors and hospitals use ultrasound gel to take ultrasound scans, sonograms, EKGs and similar procedures. In February 2012, a Michigan hospital reported that 16 surgical patients were infected with Pseudomonas aeruginosa, a bacterial pathogen.  The hospital believed the infections were associated with a particular lot of Pharmaceutical Innovations ultrasound gel.

A sample of that lot then tested positive for Pseudomonas aeruginosa.  A second lot was shipped in April 2012 and found to be contaminated with two types of bacteria, Pseudomonas aeruginosa and Klebsiella oxytoca, both at the Michigan hospital, and at the company’s Newark facility.

The U.S. Department of Justice filed suit in October 2014 against Pharmaceutical Innovations and its founder, owner, and longtime president, Gilbert Buchalter.  (Gilbert Buchalter was later dropped from the case; his son, Charles Buchalter, became company president and was added to the case.)  The civil complaint alleged that the company was selling medical devices that the U.S. Food and Drug Administration (FDA) had not approved or cleared, that it was violating current good manufacturing practices and that it failed to take required actions after receiving reports in February 2012 of serious injuries associated with its products. 

The Consent Decree of Permanent Injunction requires Pharmaceutical Innovations to submit a detailed compliance plan to FDA within 20 days, and to have outside experts certify in writing by Oct. 31, that the company meets current good manufacturing practice requirements.  The FDA will then conduct a follow-up inspection at the company’s expense. For the next three years, Pharmaceutical Innovations must hire outside auditors to conduct and submit detailed audit reports to FDA.  In addition, the company will forfeit and pay for the destruction of contaminated “Other Sonic Gel” that the U.S. Marshals Service seized in April 2012 as part of a seizure and forfeiture case filed by the United States.

The criminal investigation in this matter was handled by special agents of the FDA’s Office of Criminal Investigations’ New York Field Office, under the direction of Acting Special Agent in Charge Jeffrey Ebersole. 

The criminal prosecution was handled by Assistant U.S. Attorney R. David Walk Jr. of the U.S. Attorney’s Office for the District of New Jersey’s Health Care and Government Fraud Unit, with the assistance of Associate Chief Counsel Lynn M. Marshall of the Department of Health and Human Services’ Office of General Food-Food and Drug Division.  The civil cases were handled by Trial Attorney Daniel K. Crane-Hirsch of the Civil Division’s Consumer Protection Branch and by Senior Counsel Michele Lee Svonkin and Associate Chief Counsel Julie A. Dohm of the Department of Health and Human Services’ Office of General Counsel–Food and Drug Division.  Additional assistance in the civil cases was provided by Assistant U.S. Attorneys Lucy Muzzy, Marion Purcell, Peter Gaeta and Jacob Elberg of the U.S. Attorney’s Office for the District of New Jersey.

For more information about the Consumer Protection Branch, visit its website at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the District of New Jersey, visit its website at https://www.justice.gov/usao/district/nj.  

Updated July 7, 2016