Wednesday, July 19, 2006

Medtronic Pays $40 Million to Settle Kickback Allegations

Medical device maker Medtronic Inc. settled a civil action with the Department of Justice by agreeing to pay $40 million and entering into a corporate integrity agreement for alleged kickbacks paid to spinal surgeons to use devices manufactured by its Medtronic Sofamor Danek division.  According to a DoJ press release (here), "The government had alleged that, between 1998 and 2003, Medtronic paid kickbacks in a number of forms, including sham consulting agreements, sham royalty agreements and lavish trips to desirable locations. The Justice Department contended that these kickbacks violated the Anti-Kickback Statute and the False Claims Act."  Among the alleged sham consulting agreements included a $400,000 payment to one doctor for eight days of consulting -- not bad work if you can get it.   A St. Paul Pioneer Press article (here) notes, however, that the settlement is on the low side when compared with payments made by some of the drug companies, and could indicate that the government's case was not as strong. (ph)

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