Suit says kickbacks paid to PA doctors

A Monroeville, PA-based medical supply company has filed suit against a handful of the industry's largest players, contending that the bigger players made kickback payments to local doctors to encourage use of their products. The suit, by Intermedics-McCullough, names Zimmer Inc. and Zimmer Holdings Inc., DuPuy Orthopedics, Biomet Inc., Smith and Nephew Inc., Stryker Orthopedics and Stryker Inc. The suit also names more than two dozen Pittsburgh-area physicians, along with a listing of payments the big device firms supposedly made to them. According to the Intermedics suit, the physicians received payments ranging from less than $100 to more than $8 million.

Intermedics-McCullough, which sold replacement hip joints, knee and shoulder implants and other orthopedic and surgical products, was an independent contractor for Sulzer-Medica Inc., which sold exclusively for the firm in western Pennsylvania and West Virginia. However, Intermedics asserts that between 1988 and 2007, the defendants crowded it out of the market with inferior and more-costly products by paying kickbacks.

The Intermedics suit follows on a federal investigation of the six companies named, which are estimated to account for 95 percent of the hip and knee surgical implant market. A criminal complaint in the New Jersey-based investigation held that the firms set up consulting agreements with orthopedics surgeons as a means of inducing them to specify the companies' products. The companies (other than Stryker Orthopedics, which cooperated with authorities) reached agreements late last year with the U.S. attorneys' office to avoid criminal prosecution. They agreed to pay $311 million in fines, as well having their payments to providers monitored.

To learn more about the suit:
- read this Pittsburgh Post-Gazette article

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