Medtronic to Pay $10 Million to Settle Kickback Suit

Medtronic will pay $9.9 million to the U.S. Justice Department to resolve a lawsuit alleging that the company paid kickbacks to physicians to convince them to use its defibrillators and pacemakers.

The kickbacks in question reportedly include gifts to clinicians including paid visits to strip clubs and gifts of alcoholic beverages and tickets to sporting events. In all, the Schroeder v. Medtronic Inc. suit alleged that Medtronic poured millions of dollars into the hands of physicians to help convince doctors to use the company's defibrillators and pacemakers in patients who did not necessarily need them. The suit alleges that the patients in question had "mild heart failure symptoms did not meet [Food and Drug Administration] criteria for an implantable device."

For its part, Medtronic did not admit to wrongdoing--illegal or otherwise--in the lawsuit, which referenced events spanning from 2001 to 2009.  In addition, Medtronic stated that it had taken steps to prevent dishonest sales practices and that it publically shares payment information to clinicians on its website.

The lawsuit originated from former Medtronic employee Adolfo Schroeder, who stood to receive $1.73 of the penalty collected by the government under a federal whistleblower statute.

The lawsuit was filed on January 29, 2009.

In 2011, Medtronic paid $23.5 million to settle a separate physician kickback suit that alleged it attempted to convince doctors to use its pacemakers and defibrillators. The litigation claimed the company violated the federal False Claims Act by bribing physicians with $1000 -$2000 for every patient implanted with one of its devices. Again, Medtronic made no admission that it had done anything unlawful.

Earlier in May of this year, Medtronic agreed to pay $22 million to settle the claims of roughly 950 patients in a string of lawsuit tied to its Infuse bone graft product.