Medtronic will settle accusations on kickbacks

Medical-device giant Medtronic has agreed to pay the federal government $40 million to settle accusations that its spinal-implant division paid kickbacks to prominent spine surgeons to induce them to use its devices. The Justice Department had accused Medtronic of paying doctors through "sham consulting agreements, sham royalty agreements and lavish trips to desirable locations" from 1998 to 2003. Kickbacks to doctors "are incompatible with a properly functioning health care system," said Peter D. Keisler, assistant attorney general for the civil division, in a statement. "They corrupt physicians' medical judgment and they cause overutilization and misallocation of vital health care resources." The accusations came in two lawsuits filed by whistle-blowers. The agreement covers the first suit, filed in 2002. Naturally, Medtronic denies any wrongdoing. As part of the agreement, Medtronic will establish an electronic database to track transactions with its customers unrelated to device sales. The information will be reviewed by Medtronic senior management and an outside review group.

- for more information, read this article from The New York Times