In what may be a sign of continuing investigations, Minneapolis-based Medtronic said last week that it has since September received four letters from federal officials and lawmakers investigating whether consulting payments and other items of value provided to physicians represent a form of inducement.
Acknowledgement of the letters comes just two months after orthopedic-device makers Biomet, DePuy, Smith & Nephew, Stryker Corp. and Zimmer Holdings, agreed to 18 months of federal monitoring and a collective fine of $311 million to settle similar charges (Nov. 12, p. 14). The companies admitted no wrongdoing in the settlement; Stryker was not fined in the settlement.
Dan Purdom, a partner with the law firm Hinshaw & Culbertson, said its not unusual for such cases to drive prosecutors and lawmakers to dig deeper into industry practices. When you get a big settlement in one area, the government often turns around to see if there are similar problems in like areas, Purdom said.
Concern over such conflicts of interest also includes situations in which doctors use hospital dollars to purchase medical devices made by companies from which they receive royalties. In an ongoing dispute, surgeon Jay Yadav is suing the Cleveland Clinic for firing him over a stent that he helped develop. Yadav received royalties from the stent, and is accused by the clinic of not disclosing his financial relationship with the stent producer. In his lawsuit, Yadav has accused other clinic doctors of having financial interests in medical companies without reporting them. Cleveland Clinic denies the lawsuits allegations.
Among the letters received by Medtronicwhich specializes in spinal and cardiac deviceswas a request in September from Securities and Exchange Commission officials investigating whether payments to physicians employed by foreign governments violated the U.S. Foreign Corrupt Practices Act. Smith & Nephew, Stryker and Zimmer acknowledged getting similar SEC letters.
The other Medtronic letters included a November request from the U.S. Justice Department, also regarding payments to foreign doctors; a Sept. 20 request from Senate Finance Committee Ranking Member Chuck Grassley (R-Iowa), requesting information about Medtronics physician-consulting deals; and an October request from the U.S. attorney in Philadelphia seeking information about payments and other things of value given to physicians and hospitals in conjunction with sales of its devices.