AG: Firm fleeced docs for $100M
By Carol Gentry
12/1/2009 © Health News Florida
Florida’s Attorney General’s office has filed suit against a Tampa firm that it says made and sold more than 1,000 pricey back-pain therapy machines to physicians nationwide through “false, deceptive or misleading advertising.” Most of the doctors were chiropractors.
Defendants are Axiom Worldwide, President and CEO James J. Gibson Jr. and Vice President Nicholas Exarhos. The complaint says they co-founded the company and both participated in unlawful sales practices.
Among other misleading statements, the complaint filed Nov. 19 in Hillsborough Circuit Court says, Axiom called its DRX 9000 spinal decompression system “the eighth wonder of the world.”
Atty. Gen. Bill McCollum seeks an injunction barring Axiom from continuing to market the machine under false pretenses and also seeks a court order forcing almost $100 million in repayment to consumers and the state – the amount that Axiom received for the machine in 2005 and ’06.
Gibson told Health News Florida this morning that he cannot comment on the suit because the company hasn't received it yet.
The DRX 9000 package that is at issue in the suit cost $95,000, or $125,000 if a neck attachment is included, the complaint says.
Among the false statements, the complaint says, were that Axiom had a patent on DRX 9000, that the system was “approved” by FDA, and that NASA engineers developed it through “space age technology.”
The chiropractors who bought the system were led to believe that Medicare and private insurers would cover the treatments, when the defendants knew claims were being denied, the complaint says.
Also, it says, Axiom falsely led doctors to believe there were scientific trials showing an 86 percent success rate for the DRX 9000 in treatment of degenerative disc disease, disc herniations, sciatica and post-surgical pain.
The price included materials the doctors could use in marketing the system to the public through brochures and ads. So far, the complaint says, 12 chiropractors who used the Axiom marketing materials have been accused of false advertising by the state health department.
There, the system was said to “provide relief of pain and symptoms associated with herniated discs, bulging or protruding …discs, degenerative disc disease, posterior facet syndrome, and sciatica.”
The site also offers videos of patient testimonials and a map of practitioners who use the DRX system. In Florida, there are 68 listed.
In July 2006, North American Medical Corp. sued Axiom for trademark infringement regarding DRX 9000, but Axiom kept making false claims, the attorney general’s complaint says.
A federal district court in Georgia entered an injunction against Axiom and its executives in March 2007. A year later that injunction was vacated by an appellate court, but the findings of the lower court about the false claims were upheld.
In April of this year, nine chiropractors from other states sued Axiom, Gibson and Exarhos, saying they would never have bought the machines if they had known the truth.
Meanwhile, 11 Florida chiropractors have been fined by the state Board of Chiropractic Medicine for using the misleading marketing materials they received from Axiom. The Attorney General’s Office identified them as:
--William LaBonte of Ormond Beach.
--Manuel Carril of Miami.
--Matthew Symons and Sandra Hernandez, both of Royal Palm Beach.
--Richard Rosen of Boca Raton.
--Angelo Rubano of Fort Myers.
--Joshua Smith of Jupiter.
--Todd Bodanza of Trinity.
--Brian Reimer and Fred Blumenfeld, both of West Palm Beach.
--David Golinger of Coral Springs.
Details on the disciplinary cases are available at a state Web site.
-- Carol Gentry, Editor, can be reached at 727-410-3266 or by e-mail.