Form 8-K VASCULAR SOLUTIONS INC For: Nov 13

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report: November 13, 2014

(date of earliest event reported)

VASCULAR SOLUTIONS, INC.

(Exact name of registrant as specified in its charter)

Commission File Number: 0-27605

�

---

�

6464 Sycamore Court North

Minneapolis, Minnesota 55369

(Address of principal executive offices)

(763) 656-4300

(Registrants telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

�

---

---

�

Item 8.01.� Other Events

As previously disclosed, on June 28, 2011, Vascular Solutions, Inc. (the Company) received a subpoena from the U.S. Attorneys Office for the Western District of Texas under the Health Insurance Portability & Accountability Act of 1996 (HIPAA) requesting the production of documents related to our Vari-Lase products, and in particular the use of the Vari-Lase Short Kit for the treatment of perforator veins.� Subsequently, the Company learned that the U.S. Attorneys Office commenced a criminal investigation of the same matter.� The Vari-Lase Short Kit was sold under a 510(k) clearance for the treatment of incompetence and reflux of superficial veins in the lower extremity from 2007 until it was voluntarily withdrawn from the market in July 2014, with total U.S. sales of approximately $534,000 (0.1% of the Companys total U.S. sales for such period) and has not been the subject of any reported serious adverse clinical event.

On November 13, 2014, the U.S. Department of Justice filed a criminal indictment in the United States District Court for the Western District of Texas related to the Vari-Lase Short Kit investigation.� The indictment alleges that Vascular Solutions and its Chief Executive Officer�introduced adulterated and misbranded medical devices into interstate commerce, and�conspired to introduce adulterated and misbranded medical devices into interstate commerce.� The allegations against us are false and we will contest them vigorously.

In response to the indictment, we issued a press release, which is filed as Exhibit 99.1 to this report and incorporated herein by reference.

If we are convicted, remedies could include fines, penalties, forfeitures and compliance conditions.� Given the early stage of this proceeding, we cannot estimate the amount or range of loss, if we are convicted; however, it would likely be material.� If we were to be convicted of a crime related to the delivery of an item or service under Title XVIII of the Social Security Act, or a felony related to health care fraud, the Company would become automatically excluded by the Department of Health and Human Services (HHS) from participation in government health care programs, including Medicare and Medicaid.� If we were to be convicted of a misdemeanor related to health care fraud, the Company could be excluded by HHS from participation in government health care programs, including Medicare and Medicaid.� Exclusion from government health care programs would substantially adversely affect our ability to continue to conduct our business.� Defending the Company against the indictment will entail costs that are expected to be material and will require significant attention from management of the Company.

Item 9.01.� Financial Statements and Exhibits

Exhibit No.

Description

99.1	Press Release dated November 13, 2014 of Vascular Solutions, Inc.

---

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

---

EXHIBIT INDEX

�

Exhibit 99.1

For Immediate Release: Thursday, November 13, 2014

STATEMENT OF VASCULAR SOLUTIONS ON GRAND JURY INDICTMENT

MINNEAPOLIS  (November 13, 2014)  In response to an indictment returned today by a federal grand jury in the Western District of Texas, Vascular Solutions, Inc. (Nasdaq: VASC) issued the following statement:

The allegations against us are false and we will contest them vigorously. The indictment is the profoundly flawed product�of government attorneys who have conducted a misguided and abusive investigation. Without the company being able to present any information to the grand jury, todays action is not surprising.� It is, however, fundamentally wrong and profoundly unjust.

As previously disclosed, the U.S. Attorneys Office in San Antonio and the Consumer Protection Branch of the Department of Justice conducted a four-year investigation concerning the since-discontinued Short Kit version of our Vari-Lase product for the treatment of varicose veins in the leg. That investigation led to todays indictment, which alleges that members of Vascular Solutions sales force spoke to physicians about the use of the Short Kit to treat varicose perforator veins in the leg. The indictment further alleges that the treatment of a legs perforator veins, as opposed to the more-commonly treated saphenous veins, is outside the Short Kits labeled indications and therefore constitutes an off-label use.

We vehemently disagree with both allegations: we did not engage in any illegal off-label promotion of the Short Kit, nor did we engage in any false or misleading conduct.

Sales of the Short Kit for all clinical uses during the seven years it was on the U.S. market were $534,000, representing just 0.1% of our total U.S. sales during those years.� Over two-thirds of�our sales representatives never sold even a single Short Kit, and the Short Kit has never been the subject of any reported serious adverse event in any patient.

The discrepancy between the insignificance of our Short Kit product and the severity of the governments actions in this matter�is simply astonishing. The reason for that discrepancy will become readily apparent when the government attorneys stated motives and abusive conduct in this investigation are disclosed in our upcoming court filings.

�We cooperated fully during the governments investigation and pointed out the flaws in the governments theories and evidentiary assumptions.� While confident in our innocence, in order to avoid the costs and distractions of this matter we tried repeatedly to find a reasonable resolution, just as we achieved with the related civil lawsuit that settled earlier this year, but to no avail.

---

We will defend our company and our employees against these improper and false allegations through trial where we are confident of prevailing.� We have the resources to vigorously contest the allegations and an excellent legal team in place.

While proceeding with our legal defense, we plan to make no change to our business operations or personnel as a result of this matter.

John Erb, Chairman of the Board of Vascular Solutions, added the following statement:

I have led the independent members of the Board of Directors in providing active direction to and oversight of the companys response to this investigation. The Board of Directors unanimously supports managements handling of this matter and the companys defense against these unwarranted charges.� The Board of Directors� has determined that it is appropriate and in the best interests of Vascular Solutions that Howard Root continue as CEO throughout this legal process and to its successful resolution at trial.

To put this matter into perspective, since its inception in 1997, Vascular Solutions has created over 450 well-paid American jobs and developed over 80 new medical devices that improve patients lives.� The company has a complete and detailed compliance program, and this matter is the only allegation of a sales promotion issue that the company has received in its 17-year history. In that context, todays indictment is both disproportionate and unjust.

A grand jury indictment is not a verdict or finding of guilt, but rather a determination of whether a crime should be charged.� Only the prosecuting attorney is allowed to present evidence to the grand jury, and no judge or defense attorney is present during the grand jury sessions.� The validity of the charges included in the indictment is determined only by a jury following trial.

The Vari-Lase Short Kit was sold in the U.S. from October 2007 through July 2014 under an FDA 510(k) clearance for the treatment of varicose veins and varicosities associated with superficial reflux of the great saphenous vein and for treatment of incompetence and reflux of superficial veins in the lower extremity.

The criminal investigation is related to a qui tam whistle-blower civil lawsuit filed in 2010. The U.S. Attorneys office for the Western District of Texas intervened in the civil lawsuit, in part, in 2012.� On January 22, 2014, the company reached an agreement with the Department of Justice to settle the civil lawsuit, and a settlement agreement was fully executed on July 28, 2014. Under the terms of that agreement, the company paid $520,000 with no admission of fault or liability, and the U.S. Attorneys office supported dismissal of the civil lawsuit with prejudice and released all civil claims brought against the company in the civil lawsuit.� As previously disclosed, the settlement of the civil lawsuit had no effect upon the criminal investigation.

The indictment returned today by a federal grand jury�in the Western District of Texas charges Vascular Solutions and its Chief Executive Officer�with introducing adulterated and misbranded medical devices into interstate commerce and conspiracy to introduce adulterated and misbranded medical devices into interstate commerce.

---

As has been previously disclosed, conviction of the company of a crime under statutes related to fraud could result in the companys exclusion from participation in all U.S. government health care programs including Medicare and Medicaid, which would substantially adversely affect the companys ability to continue to conduct its business. Conviction of an employee of a crime under statutes related to misbranding and health care fraud could result in termination of the employees employment with the company and prohibition from employment with any health care company that contracts with the federal government.

Additional information concerning this matter is included in a Form 8-K report filed today with the Securities and Exchange Commission and available on the SEC website.

Vascular Solutions, Inc. is an innovative medical device company that focuses on developing unique clinical solutions for coronary and peripheral vascular procedures.� The companys product line consists of more than 80 products and services in three categories: catheter products, hemostat products and vein products.� Vascular Solutions delivers its products and services to interventional cardiologists, interventional radiologists, electrophysiologists, and vein specialists through its direct U.S. sales force and international independent distributor network.

For further information on Vascular Solutions, connect to www.vasc.com.

Investors:

Phil Nalbone

VP of Vascular Solutions

[email protected] (763) 656-4371

Media:

Jon Austin

J Austin & Associates

[email protected] (612) 839-5172

# # #