Healthcare Business News

Medtronic settles whistle-blower lawsuit for $9.9M

By Associated Press
Posted: May 29, 2014 - 1:15 pm ET

Medical-device maker Medtronic will pay the U.S. Justice Department $9.9 million to settle a lawsuit that accused the company of giving doctors gifts in return for using its defibrillators and pacemakers.

Medtronic has not admitted any wrongdoing as a result of the settlement. The lawsuit unsealed this week accused Medtronic of funneling "millions of dollars in unrestricted grant money to physicians" to get them to encourage the use of Medtronic defibrillators and pacemakers.

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"Improper financial incentives have the potential to compromise physician medical judgment," said Assistant Attorney General Stuart F. Delery of the Justice Department's Civil Division. "This case demonstrates the Department of Justice's commitment to pursue medical device manufacturers that use improper financial relationships to influence physician decision-making."

Medtronic said the settlement brings to a close a long-running review dating back to 2001 and that it has taken steps to prevent inappropriate sales practices, including voluntarily disclosing payments to healthcare professionals on its website.

"Over the last several years we have adopted a number of important policies and procedures related to collaboration with healthcare professionals," the company said.

The settlement is the result of a whistle-blower complaint filed by a former Medtronic employee, Adolfo Schroeder. Schroeder will receive about $1.7 million for his role in bringing the matter to light, the Department of Justice said.

The lawsuit also alleged Medtronic paid thousands of dollars in speaking fees to doctors for attending dinners at which they spoke for only a few minutes, if at all. In other cases, Medtronic allegedly prepared entire presentations for the physicians.

The Justice Department had accused Medtronic of violating the federal False Claims Act by providing speaking fees, developing free marketing plans and providing tickets to sports events to doctors who used its defibrillators and pacemakers in Medicare and Medicaid patients and who recommended their use to others.

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