Lawsuit Filed in 2002 Alleged Surgeons Received Improper Incentives From Medtronic To Prescribe Products
A lawsuit filed in 2002 against Medtronic and 10 surgeons includes previously undisclosed allegations that the surgeons received improper incentives to prescribe products manufactured by the company, the Wall Street Journal reports. Except for a "heavily redacted" copy, the lawsuit remains sealed for undetermined reasons, but the Journal obtained an unedited copy.
According to the lawsuit, filed in U.S. District Court in Memphis, Tenn., the spinal device division of the company offered the surgeons "pervasive" incentives to prescribe products manufactured by the company, a practice in line with the "culture and way of doing business" at Medtronic. The incentives included "lavish trips" that the surgeons took "under the guise of medical conferences," the Journal reports. Ami Kelley, a former senior legal counsel for the spinal division of Medtronic who alleges that the company fired her after she questioned improper incentives, filed the lawsuit.
The lawsuit sought to recoup federal funds paid to Medtronic for products covered by Medicare and Medicaid. Federal rules prohibit the use of incentives to prompt physicians to prescribe medications or medical devices to Medicare and Medicaid beneficiaries. Whistle-blowers who file lawsuits that allow the federal government to recoup funds in such cases receive a portion of those funds.
Settlement
In 2006, Medtronic settled the lawsuit filed by Kelley and a separate case that included similar allegations against the spinal division of the company as part of a $40 million agreement with the federal government. The settlement dismissed the lawsuits, but the woman who filed the other lawsuit has appealed the dismissal of her case on the grounds that the amount of the settlement was inadequate.
In the event that an appeals court reverses the dismissal, either the federal government or Medtronic could withdraw from the settlement. "It isn't clear what would happen to the Kelley lawsuit if the settlement agreement were voided," the Journal reports.
Medtronic denied any wrongdoing and refused to comment on the allegations in the lawsuit. Medtronic representatives also said that the company changed business practices since Kelley filed the lawsuit. According to Medtronic representatives, the company is "committed to reform and transparency in the industry" (Armstrong, Wall Street Journal, 9/25).
