Medtronic under scrutiny for consulting contracts, conferences

According to this article in the New York Times (free registration req'd), a whistleblower lawsuit filed by (of course) a former employee claims that the same sort of "bribery" and influence peddling the pharmaceutical industry has been accused of also is rampant in the medical device area, specifically at Medtronic. From the article:

    The documents shed new light on a matter that has troubled the medical device industry for years: the assertion that companies employ a variety of financial ruses to pay doctors who use their devices, a practice that medical and legal experts say is unethical and possibly illegal. But despite industry efforts to clean up such practices, the documents and accusations made by former Medtronic employees suggest that the problem persists and may have gotten worse.

    The lawsuit, filed in United States District Court in Memphis two years ago and since amended, was brought by the whistle-blower, a former Medtronic employee. The Justice Department, which has the right to intervene in the case but has not yet done so, is seeking to recover Medicare funds. According to legal filings, it proposes that Medtronic settle the matter by paying $40 million.

    The suit, which was sealed until Jan. 13, accuses Medtronic of giving spine surgeons "excessive remuneration, unlawful perquisites and bribes in other forms for purchasing goods and medical devices."

To step over the line into illegality, the payments must be shown to be made to try to induce the docs to use their products. In addition to giving docs consulting fees that sound pretty lucrative to me, the plaintiff, who served as a travel manager before leaving the company, also said (and here's the kicker for CME):

    Medtronic played host at medical conferences where the "principal objective" was to "induce the physician, through any financial means necessary" to use its devices. According to the Medtronic documents, the company closely tracked the use of its devices by the doctors who attended the conferences, choosing some for "special attention."

We'll probably be hearing a lot more about this one—stay tuned.

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