Coloplast and Liberator: The Price of Switching a Patient

In the Coloplast Liberator 2015 switching settlement, Coloplast agreed to pay $3,160,000 and Liberator Medical Supply $500,000 to resolve allegations of kickbacks for campaigns steering patients to Coloplast products. The alleged bargain put a supplier’s purchasing terms and its customers’ product choices on opposite sides of the same deal. The supplier allegedly received a better price in return for promoting the manufacturer’s products.

The U.S. Attorney’s Office in Massachusetts announced the settlements on December 22, 2015. Coloplast manufactured ostomy and continence care products. Liberator supplied medical products to customers, and its settlement concerned price concessions for two campaigns promoting Coloplast ostomy products. In the government’s account, the manufacturer supplied the concession. The supplier supplied the customers.

The Supplier Controlled the Repeat Order

Ostomy supplies serve a continuing need. The whistleblowers’ complaint describes patients using collection bags and pouches after their intestine has been redirected to an opening in the abdominal wall. It explains that many ostomy and continence care patients need disposable supplies over an extended period or for the rest of their lives.

That gives a product switch a commercial life beyond the first order. The complaint alleged that Coloplast and Hollister understood how control of a patient’s product choice could produce recurring revenue. It said a Coloplast presentation described ostomy and continence consumer care as an “annuity business.”

The whistleblowers alleged that Coloplast targeted suppliers with at least $1 million in potential business, direct access to patients, and a willingness to pressure them to switch from competing products and pursue upselling. Access to the patient was part of what the manufacturer allegedly wanted to buy.

For Liberator, the government identified price concessions exchanged for its promotional campaigns.

What a Hard Conversion Meant

A hard conversion could mean telling a patient the familiar product was no longer available. In its allegations about CCS Medical, a separate supplier, the complaint described the exchange this way:

We see an ugly bargain in that allegation. The supplier gets a lower price, while the patient gets told a choice has disappeared.

From a Price Concession to a Medicare Claim

The alleged chain ran from the manufacturer’s discount to the supplier’s campaign, then to the product sold and the health care program billed. The complaint describes ostomy and continence care supplies as covered by Medicare Part B and identifies Liberator as a Medicare-enrolled supplier selling to beneficiaries.

For CCS, the whistleblowers specifically alleged that the conversion campaigns produced false Medicare claims. Their complaint pointed to sample claims data that the government had obtained from the Centers for Medicare and Medicaid Services. That connects the campaign allegation to the supplier’s billing, where the government’s money entered the story.

A 2020 analysis in the Journal of Forensic and Investigative Accounting describes healthcare kickbacks as economic relationships that can extend beyond a simple payment for services, with benefits in cash or in kind. That helps explain the supplier-campaign allegations: the benefit could appear in the price of a product, while the return appeared in the supplier’s commitment to promote it.

For an insider, the useful connections run through campaign commitments, pricing correspondence, customer conversions and the resulting supply claims. We examine those connections with you: what the manufacturer offered, what the supplier agreed to do, and how the promotion reached a government-paid order. A pricing employee and a supplier’s billing employee may see different ends of the same arrangement.

The Settlement Amounts and the Whistleblower Case

Two former Coloplast employees and one current employee brought the False Claims Act case. The Federal Bureau of Investigation and the Department of Health and Human Services Office of Inspector General investigated it.

The Coloplast and Liberator settlements were part of the $24.6 million recovery the Justice Department announced in April 2016. That later announcement covered separate settlements with Hollister and Byram in the same whistleblower case.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

Liberator’s Later Catheter Prescription Case

C.R. Bard and its subsidiary Liberator Medical Supply later reached a separate settlement announced in January 2025 over alleged inducements to urology practices to prescribe Bard catheters through Liberator.

You Know What the Discount Bought

If you know how a supplier discount became a patient-switching campaign, speak with our whistleblower experts about the pricing files, campaign terms or customer records you know firsthand. We build the case with you and bring in medical-device whistleblower lawyers who understand supplier incentives and Medicare billing. From the first call through the case, we stay on your side.