Medtronic, Inc will pay US$40 million to settle two suits (from 2002 and 2004) from the US Justice department regarding it’s compensation and sales tactics for surgeons. Of course, they’ll be admitting to nothing…
Medtronic Inc. (MDT.N: Quote, Profile, Research) will pay $40 million to settle allegations it gave kickbacks to doctors, including lavish trips, to encourage them to use its spinal products, the U.S. Justice Department said on Tuesday.
The company was accused of paying kickbacks, that also included sham royalty and consulting agreements, between 1998 and 2003, the government said.
Medtronic, in a statement, said it maintains neither the company nor current employees engaged in any wrongdoing or illegal activity.
Medtronic also said it has agreed to strengthen its employee training and compliance systems surrounding sales and marketing practices.
It’s unclear how long they expected to hold annual all-expenses-paid meetings in Cancun before someone took note. One could argue some responsibility probably rests on the surgeons involved as well. If the concern is that an inferior product be used because of a kickback deal, then much of that (unadmitted) guilt should probably lie on the surgeon who allowed himself to be bought. Of course, that only assumes that the product is inferior to another readily available on the market, which is hard to prove.
Here’s the rest from the stocks section of Reuters, where you can see what the news is doing to their share price (we’ll give you three guesses…).
