Zimmer Announces New Compliance Model

Company Initiates Fundamental Changes to Create a Sustainable Model for Growth

WARSAW, Ind., April 17 /PRNewswire-FirstCall/ -- Zimmer Holdings, Inc.
(NYSE: ZMH; SWX: ZMH) today announced comprehensive changes in its corporate
compliance model aimed at establishing an enhanced standard for ethical
business practices that will support the development and marketing of products
and services that address unmet clinical needs and better serve the healthcare
markets of the future.
The refined compliance model is designed to aggressively reduce potential
or perceived conflicts of interest inherent in consulting relationships
between the industry and healthcare professionals-while preserving the best of
the collaboration that drives innovation in medical devices and services. The
model includes fundamental changes in the areas of product development,
marketing, surgeon training, educational and charitable funding, and
transparency.
"Collaboration with physicians will always be critical to advancing
medical technology that improves patients' lives. But the historical model
for collaboration requires change to continue inspiring the confidence and
trust of our stakeholders," said David Dvorak, Zimmer Holdings President and
Chief Executive Officer. "The new model we have recently developed at Zimmer
implements principles and systems that we believe will drive greater
transparency, value to the healthcare system and even more efficient and
effective product development cycles. We consider these to be emerging best
practices that are necessary to ensure a vibrant future for the medical device
industry and for the patients our industry serves."
This model builds upon Zimmer's existing Corporate Compliance Program and
is consistent with the Company's commitment to meet and exceed the
requirements of its September 2007 resolution agreements with the U.S.
government.
"We have taken our obligations under these resolution agreements extremely
seriously and have now embraced the opportunity to move beyond their
requirements to create a more sustainable model for the growth of our business
over the long-term," Mr. Dvorak said.
A Global Framework for Ethical Business Practices
The enhanced compliance model, developed through an extensive review and
planning process by Zimmer, is being implemented globally through an
enterprise-wide initiative. Highlights of the new model include the following
initiatives:
-- ESTABLISH NEW ENGAGEMENT AND COMPENSATION STRUCTURES FOR HEALTHCARE
PROFESSIONAL CONSULTANTS. Zimmer is currently reviewing all U.S.
royalty-bearing hip and knee development agreements to ensure
consistency with the fair-market-value principles of its 2005 Corporate
Compliance Program, and is working with a third party to establish the
compensation structure for future agreements with healthcare
professional consultants. The Company said payments to consultants
that have been suspended during the review process will be resolved
appropriately as individual contract reviews are completed.
-- REALIGN MARKETING SYSTEMS, INFRASTRUCTURE AND PRACTICES. Zimmer is
improving and extending internal firewalls to prevent sales,
distribution and other marketing teams from having any involvement with
physician consultant agreements, services or payments. In addition,
Zimmer is banning all Company gifts to healthcare professionals,
prohibiting Zimmer-sponsored healthcare professional presentations at
medical society events, and moving to eliminate the use of quotations,
endorsements, images and product-branding by healthcare professionals,
other than scientific literature references.
-- CENTRALIZE SURGEON TRAINING AND EDUCATION. The Company is launching a
more rigorous, integrated and advanced level of surgical-skills
training that further protects the integrity of training interactions.
The training will be objective-based, delivered through corporate
approved Zimmer Institute courses. The Company is eliminating existing
satellite Institutes at customer locations in the U.S. The Company
also will cease utilizing physicians to train and educate on products
for which they may receive royalty-based compensation connected to the
Company's sales of the products.
-- ESTABLISH A THIRD-PARTY MECHANISM TO OVERSEE AND DISBURSE ZIMMER'S
EDUCATIONAL AND CHARITABLE CONTRIBUTIONS. Zimmer will continue its
commitment to corporate giving, but will work through independent third
parties to ensure all funding decisions remain free of perceived or
actual influence by the Company. The Company will provide an annual
monetary donation to one or more third-party institutions for all
worldwide educational and resident/fellowship funding. The Company
also will make an annual in-kind product donation to one or more
independent, global third-party charitable institutions and, in lieu of
gifts to individual healthcare professionals, make cash donations to
independent third-party institutions that will utilize the contributed
funds to provide needed education-related resources, such as anatomical
models and medical textbooks.
-- DEVELOP GLOBAL INFRASTRUCTURE AND SYSTEMS. Although its resolution
agreements apply only to Zimmer's U.S. hip and knee business, the
Company is making its enhanced compliance standards global and
applicable to all of its business units. In addition, Zimmer will
require all healthcare professional consultants to participate in
annual Zimmer corporate compliance and ethics training programs, and
will require them to disclose compensation arrangements to patients,
employers and hospitals where they have privileges.

Zimmer's Commitment to a Sustainable Model
Zimmer's continuous consideration of its compliance standards, combined
with measures taken by the Office of the Inspector General of the Department
of Health and Human Services and other bodies to guide industry in the
prevention of healthcare fraud and abuse, prompted the Company early in the
decade to re-evaluate thoroughly its model for the management of conflicts of
interest that may result from collaboration. This re-evaluation led to the
implementation of an enhanced Corporate Compliance Program in 2005. At the
time of the settlement in September 2007, the U.S. Attorney for the District
of New Jersey acknowledged that Zimmer's 2005 Corporate Compliance Program
provided many of the requirements contained in the agreements the five leading
orthopaedic companies entered into with the Department of Justice.
"We have been working steadily for a number of years to establish a
standard for ethical business practice that creates the optimal environment
for the development and marketing of products that are best-in-class, in terms
of the benefit they deliver to patients, the difficult problems they solve
across the clinical continuum, and their quality. We need to constantly
strive to deliver this kind of value, and conduct the surgeon training that is
so vital to patient outcomes, in ways that inspire the trust of a diverse set
of stakeholders. We believe this effort is fundamental to a truly robust
business model for the future," Mr. Dvorak said.
"We still have much work to do in order to implement fully these enhanced
business practices, but we are firmly committed to establishing this new
standard," Mr. Dvorak added. "Ultimately, our goal is to ensure that patients
benefit from innovations focused on their needs, and that everyone with a
stake in quality healthcare can rest assured that physicians choose products
based on what they believe is best for patients."
About the Company
Founded in 1927 and headquartered in Warsaw, Indiana, Zimmer is a
worldwide leader in designing, developing, manufacturing and marketing
orthopaedic reconstructive, spinal and trauma devices, dental implants, and
related orthopaedic surgical products. Zimmer has operations in more than 25
countries around the world and sells products in more than 100 countries.
Zimmer's 2007 sales were approximately $3.9 billion. The Company is supported
by the efforts of more than 7,500 employees worldwide.
Zimmer Safe Harbor Statement
This press release contains forward-looking statements within the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995
based on current expectations, estimates, forecasts and projections about the
orthopaedics industry, management's beliefs and assumptions made by
management.
Forward-looking statements may be identified by the use of forward-looking
terms such as "may," "will," "expects," "believes," "anticipates," "plans,"
"estimates," "projects," "assumes," "guides," "targets," "forecasts," and
"seeks" or the negative of such terms or other variations on such terms or
comparable terminology. These statements are not guarantees of future
performance and involve risks, uncertainties and assumptions that could cause
actual outcomes and results to differ materially. These risks and
uncertainties include, but are not limited to, our compliance with the
Deferred Prosecution Agreement through March 2009 and the Corporate Integrity
Agreement through 2012, the impact of our enhanced healthcare compliance
global initiatives and business practices on our relationships with customers
and consultants, our market share and our overall financial performance, the
success of our quality initiatives, the outcome of the informal investigation
by the U.S. Securities and Exchange Commission into Foreign Corrupt Practices
Act matters announced in October 2007, price and product competition, rapid
technological development, demographic changes, dependence on new product
development, the mix of our products and services, supply and prices of raw
materials and products, customer demand for our products and services, control
of costs and expenses, our ability to obtain and maintain adequate
intellectual property protection, our ability to successfully integrate
acquired businesses, our ability to form and implement alliances,
international growth, our compliance with governmental laws and regulations
affecting our U.S. and international businesses including regulations of the
U.S. Food and Drug Administration and foreign government regulators and tax
obligations and risks, product liability and intellectual property litigation
losses, reimbursement levels from third-party payors, cost-containment efforts
of healthcare purchasing organizations, our ability to retain the independent
agents and distributors who market our products, general industry and market
conditions and growth rates and general domestic and international economic
conditions including interest rate and currency exchange rate fluctuations.
For a further list and description of such risks and uncertainties, see our
periodic reports filed with the U.S. Securities and Exchange Commission. We
disclaim any intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise,
except as may be set forth in our periodic reports. Readers of this document
are cautioned not to place undue reliance on these forward-looking statements,
since, while we believe the assumptions on which the forward-looking
statements are based are reasonable, there can be no assurance that these
forward-looking statements will prove to be accurate. This cautionary
statement is applicable to all forward-looking statements contained in this
document.
SOURCE Zimmer Holdings, Inc.

Media: Brad Bishop, +1-574-372-4291, bradley.bishop@zimmer.com; Investors:
Paul Blair, +1-574-371-8042, paul.blair@zimmer.com, or James T. Crines,
+1-574-372-4264, james.crines@zimmer.com, all of Zimmer Holdings, Inc.