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Part II Venture Capital Firm New Enterprise Associates (NEA) Funds Medical Device Fraud

Part II Venture Capital Firm New Enterprise Associates (NEA) Funds Medical Device Fraud

Updated: March 26, 2016

The Sociopathic Business Model™ often reminds employees, consumers, patients, long-term shareholders and taxpayers to take the billion dollar blinders off of venture capital, made only more difficult by media elevating #GodsOfFrauds to hero status.   The New York Times Top 20 Venture Capitalists Worldwide or Forbes Midas List both of which highlight people from venture capital firm New Enterprise Associates (NEA), neglect to mention the much darker side of venture capital: fraud.

November 5, 2015

Part I: Venture Capital Firm New Enterprise Associates (NEA) is Paid to Kill Women

Frank Torti Jr. & Josh Makower are NEA partners and on the ExploraMed Incubated NEA & Johnson & Johnson Development Corporation funded startup Neotract

Frank Torti Jr. & Josh Makower are NEA partners and on the ExploraMed Incubated NEA & Johnson & Johnson Development Corporation funded startup Neotract Board together.

Follow the money to find fraud in startups

*NEA was the principle venture capital firm 44.5% stake along with Johnson & Johnson Development Corporation JJDC (Johnson & Johnson’s venture capital division)**, Delphi Ventures, and Meritech Capital Partners 

Part II: Venture Capital Firm New Enterprise Associates (NEA) Funds Medical Device Fraud

Headshot Alex Gorsky

Worldwide Chairman & CEO of Johnson & Johnson Alex Gorsky

Headshot Gary Pruden

Worldwide Chairman of Johnson & Johnson Medical Devices Gary Pruden

Johnson & Johnson Worldwide, Venture Capital firm New Enterprise Associates (NEA) Worldwide, and startup incubator ExploraMed, Mountain View, CA share a long history of creating & funding startup medical device fraud and is one of this country’s best kept secrets, by design. An exclusively obtained 41-page, first-person slide presentation from ExploraMed Founder and NEA Venture Partner, Josh Makower titled The Art Of Innovation, shows that unethical & illegal behavior is encouraged, replicated and rewarded and viewed positively while ethical behavior is removed and viewed negatively within the corporate culture and sales model.    A sales model requested  March 1, 2010 by Johnson & Johnson Worldwide Chairman & CEO Alex Gorsky and Worldwide Chairman of Medical Devices, Gary Pruden,  just two months after Makower’s incubated startup Acclarent funded by NEA & Johnson & Johnson* sold to Johnson & Johnson’s Ethicon subsidiary for $785 million, this presentation became known internally at Johnson & Johnson as “Josh’s presentation,” and shared with more than 200 Johnson & Johnson executives and employees with the implied intent to replicate the success of the Acclarent sales model.

Med tech doesn't have as many venture-backed billion dollar unicorns but Acclarent in 2010 was close.

Med tech doesn’t have as many venture-backed billion dollar unicorns but Acclarent in 2010 was close.

The success of the Acclarent sales model came to life on April 8, 2015, and yielded the arrest & indictment of former Johnson & Johnson Ethicon Acclarent CEO William (Bill) Facteau & VP of Sales & Training Patrick (Pat) Fabian for 18 counts of  securities fraud and crimes related to the sales and distribution of medical devices, who are currently awaiting trail and out on $5 million & $500,000 bail.  Facteau & Fabian, with funding from the pharmaceutical & medical device industry under the name Public Citizen, are currently fighting these charges citing the First Amendment as their defense.   This is the unethical and illegal business model that’s being encouraged, replicated and rewarded within a very corrupt funding cycle.

While Johnson & Johnson is the most notable of the companies, privately held New Enterprise Associates (NEA) is the world’s largest venture capital firm with $17 billion in committed capital across 15 funds, and quite possibly worth more than Johnson & Johnson’s reported estimate of $133 billion.  Incubator ExploraMed founded by Josh Makower who also co-founded startup Acclarent with John Chang  received 44.5% of the company’s $100 million raised from NEA. It probably didn’t hurt that Makower is also an NEA Venture Partner and two other NEA Venture Partners Ryan Drant and John Nehra sat on the ExploraMed Board. Drant is still a current ExploraMed Board Member where Nehra recently retired from NEA and ExploraMed.

All three companies, Johnson & Johnson, NEA & ExploraMed are funding and feeding the medical device fraud cycle where the long-term damage of costing patients their health or lives and taxpayers billions is going unnoticed, until now.

The Art of Innovation

(Created as INCUBATOR INNOVATION) by ExploraMed Founder & NEA Venture Partner Josh Makower (first person presentation). (Unedited – metadata removed)

1 Josh Makower MD Chairman CEO Exploramed Associate Consulting Professor of Medicine Standford NEA Venture Partner The Sociopathic Business Model

Josh Makower’s impressive CV affords him opportunities to address government agencies & Congress regarding repealing the 2.3% excise medical device tax and the medical device approval process known as the 510 k.

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Josh Makower’s extensive reach through incubator ExploraMed, as a Venture Partner with NEA and an Associate Professor of Medicine at Stanford University.

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The Sociopathic Business Model™ maintains the word “innovation” is often used as a justification for the manipulation of facts to break laws to meet ROI for investors without regard to patient needs.

NEA Parnter & ExploraMed Fouder indicates he sees his innovations in the same realm as Eienstein.

Is Josh Makower implying his talents are on par with great male innovators in history? Is this insight as to how he views himself or thinks others should view his innovations?

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Important Elements = Easily Manipulated

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Novel IP = ExploraMed  & Acclarent sued for Patent Infringement

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Using the startup buzz-words of “Diverse Team” but only as it relates to targeting the ‘customer,’ and NOT to be confused with company diversity.

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Invent = Patent Infringement Assess = Manipulation of facts to FDA & employees

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Financial Modeling = Falsely obtained Hypergrowth Marketing Strategy = Fraud Clinical & Regulatory Strategy = Fraudulently obtain 510 k Ethical Considerations = Joke Management Planning = Easily Manipulated

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ExploraMed is an incubator in bed with Venture Capital firm NEA where the cost is to patients & taxpayers while the only paradigm shifting is money.

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John Nehra and Ryan Drant were both NEA Venture Partners and on the ExploraMed Board which demonstrates they were knowledgeable & complicit with decisions made within the company.

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The Sociopathic Business Model™ maintains that companies engaging in unethical & or illegal activity will often change names to distance from crime.

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Instantly Applying Lessons Learned = After Acclarent was sued for patent infringement, where they settled out of court for an undisclosed amount, Chang & Makower became hypervigilant in obtaining patents, even getting one that would not permit another balloon to enter through the natural opening of the nose.

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Anton Clifford MoxiMed, Ted Bender Vibrynt, Ted Lamson NeoTract, John Chang Acclarent (ExploraMed’s greatest financial success)

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Don’t take in people with ideas already in mind = Just take their ideas Don’t allow any politics or BS =Don’t let regulatory laws like the 510 k stand in the way of innovation.

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Acclarent-ExploraMed’s most successful incubated startup to date. The business model that Johnson & Johnson, requested, shared and emulated, and entrenched in both NEA & ExploraMed ventures who are still in 2015 funded by Johnson & Johnson for other startups.

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Acclarent Co-Founded in 2004 by Josh Makower & John Chang

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Recurited (or in Josh’s words earlier a carefully selected) CEO William (Bill) Facteau who previously never held a position above middle manager. The Sociopathic Business Model™ maintains that in startups CEO’s are often carefully selected for their lack of experience as a means to easily manipulate them into doing what the Board of investors wants & not what’s best for patients, also known as a CE(n)O, because there’s no way this CEO is qualified.

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Bill builds a great management team who bought into the manipulation of facts then sold to the salesforce & uses fear, threats & intimidation to execute the plan. QUITE A FEW THINGS MISSING FROM THIS SLIDE:

Click the bolded bars below for additional support documents.

January 2005 Acclarent Fraudulently Files a Patent

Acclarent files a fraudulent patent John-Chang-Joshua-Makower-Julia-Vrany-Theodore-C-Lamson-Amrish-Jayprakash-Walke

Patent Inventors and Acclarent Co-Founders Josh Makower and John Chang in 2005 knowingly & willfully filed a patent on balloon products they did not invent, Dr. Bruce Becker filed a patent in 2002 and through Quest Medical was working in conjunction with Acclarent on development & manufacturing. Julia Vrany, Theodore Lamson & Amrish Jayprakash Walke also listed as inventors.

 

Bruce Becker Acclarent

September 2005 Acclarent sued for Patent Infringement

Dr. Bruce Becker  & Quest Medical Inc. et al sue Acclarent et al  (Including ExploraMed Makower, Chang & CEO Facteau)  patent infringement, tortious interference, breach of contract & misappropriation of trade.

Noticeably missing from this lawsuit, Venture Capital firm NEA, despite Josh Makower, John Nehra & Ryan Drant all NEA Venture Partners and ExploraMed Board Members.

NEA Venture Partners and ExploraMed Board Members Ryan Drant & John Nehra

June 2006 Acclarent Pays to Settle Patent Infringement

Acclarent agrees to pay an undisclosed amount to settle the lawsuit.

Quest Medical vs. Acclarent 2Quest Medical vs. Acclarent 3

August 2006 Acclarent Files Fraudulent 510 (k) with FDA

Two months after settling the patent infringement lawsuit on one product, Josh Makower, John Chang, Bill Facteau and Acclarent files their first fraudulent 510(k) with the FDA on another product according to The United States Department of Justice Assistant United States Attorneys Sara Miron Bloom & Patrick M. Callahan:

DOJ ExploraMed NEA First False 510 k

DOJ ExploraMed NEA First False 510 k 2

DOJ ExploraMed NEA First False 510 k 3

The patent on the product in question the Stratus Microflow Spacer was filed  in 2004 by NEA Venture Partner, ExploraMed Founder, Acclarent Co-Founder Josh Makower with Acclarent Co-Founder John Chang, and Julia Vrany, Amrish Jayprakash Walke.


2010-2013 Johnson & Johnson Complicit with Fraud

January 2010, Johnson & Johnson under subsidiary Ethicon purchased Acclarent for $785 million.  Johnson & Johnson was an Acclarent Venture Partner through Johnson & Johnson Development Corporation (JJDC),  aware of the fraudulently obtained 510 (k) & off-label promotion of the Stratus Microflow Spacer, in that the company reportedly lowered the originally higher asking purchase price to $785 million related to concerns about Stratus.

Johnson & Johnson knowingly and willingly continued to sell a product they knew fraudulently obtained a 510 k 2010 2013

Johnson & Johnson was complicit with fraud selling the Stratus Microflow Spacer from January 2010 until May 2013 when the company, under federal investigation, decided to pull the product from the U.S. market.

2015 Johnson & Johnson (JJDC), NEA & ExploraMed

One is done and more pop up:

Venture Capital        Incubator              Startup

NEA JJDC               ExploraMed          Acclarent

NEA JJDC               ExploraMed          MoxiMed

NEA JJDC               ExploraMed          NeoTract (Theodore Lamson (Former CEO)

NEA                                                           EarLens (former CEO of Acclarent William (Bill) Facteau) CEO

New trick, trying not to disclose who the investors are, hope the government gets on this quickly.

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Able to shape culture = Manipulate

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Not able to manipulate the CEO like at Acclarent

If they agree (accomplices) if not become (victims)

Only one person with an Einstein complex per company

Placing blame without taking accountability

Insult & demean

Created an unhappy/unproductive work environment

Checklist-of-Characteristic-of-The-Sociopathic-Business-Model (1)

 

 

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Choose a leader you are 100% confident you can manipulate “shares the vision,” willing to commit fraud pathologically

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ExploraMed, Chairman & CEO, Associate Consulting Professor of Medicine Stanford Univeristy & NEA Venture Partner, Josh Makower lobbied Congress to repeal the 2.3 % medical device tax and through medical device funded advocacy group Citizen Petition tried to make the pathway to obtaining a 510(k) easier.  A pathological professional history of manipulating facts without shame, remorse guilt or accountability while not recognizing the rights of others from patent infringement to fraudulently obtaining a 510(k) should prevent ExploraMed’s Josh Makower from presenting to any government agency on behalf of the public, citizens, or even the industry.

Fortunately, in part Makower’s Acclarent was already on the federal government’s radar when the FDA struck down the Citizen Petition in 2014, requesting a faster pathway for the 510(k). Faster than purposely setting out to defraud the U.S. Government by fraudulently obtaining a 510 (k) Makower & Chang held the patent to?  Guessing that wasn’t in his presentation.   Manipulation was the key to success for the Acclarent sales model created by ExploraMed,  funded by NEA and replicated by Johnson & Johnson.

Part III:  Johnson & Johnson, NEA & ExploraMed  Following the Money.

 

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2 Comments
  • phd student
    Reply

    hey thanks for the powerpoint those slides were really useful introduction to the world of IP. not sure why all the interpretation has to be so negative. he is being clear and transparent about the process that underlies the way the industry is working actually I appreciated that throughout the powerpoint

    November 12, 2015 at 8:53 pm

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