(Adds Medtronic statement)
May 28 Medtronic Inc has agreed to pay
the United States $9.9 million to settle claims that the company
used kickbacks to induce doctors to implant its pacemakers and
defibrillators in patients, the U.S. Department of Justice said.
The government had accused Medtronic of inducing doctors to
use its products by paying them to speak at conferences,
developing marketing and business plans at no cost, and
providing tickets to sports events.
"These sorts of improper financial incentives not only
undermine the integrity of medical decisions, they also waste
taxpayer funds and are unfair to competitors who are trying to
play by the rules," U.S. Attorney Benjamin Wagner in Sacramento,
California, said in a statement on Wednesday.
Medtronic, in a separate statement, said the accord resolves
claims over its marketing practices from 2001 to 2009, and
involves no admission of wrongdoing. The company also said it
has in recent years adopted new policies governing its business
relationships with doctors.
The whistleblower case resolved claims under the federal
False Claims Act against Minneapolis-based Medtronic, one of the
world's largest heart device makers.
It was originally brought by Adolfo Schroeder, who said he
was a business development manager who joined Medtronic in May
2006. Schroeder will receive about $1.73 million in the
settlement, the government said.
Medtronic reported net profit of about $3.07 billion for its
fiscal year ended April 25. The company said it set aside money
for the settlement in its fiscal fourth quarter.
The case is U.S. ex rel Schroeder v. Medtronic Inc, U.S.
District Court, Eastern District of California, No. 09-00279.
(Reporting by Jonathan Stempel in New York; editing by Tom
Brown and Matthew Lewis)