Medical device manufacturer Medtronic has voluntarily disclosed that it paid almost $16 million in royalties and consulting fees in the first quarter of 2010. Of this amount, the vast majority–$14.2 million–went to orthopaedic specialists or surgeons, with $13.9 million of that in the form of royalties for surgical inventions. More than 200 doctors were the beneficiaries of Medtronic’s largess, including 13 in Medtronic’s squeaky-clean home state of Minnesota. One orthopaedic surgeon in Tenessee received almost $4 million in royalties!
Investigators with Senate Finance Committee under Senator Chuck Grassley have been investigating Medtronic’s relationship with several orthopaedic surgeons for years. In 2006, Medtronic agreed to pay the government $40 million to settle allegations that the company paid kickbacks to surgeons to get them to buy Medtronic products. The DOJ described Medtronic’s relationships with doctors as “sham consulting agreements, sham royalty agreements and lavish trips to desirable locations” which the company offered to doctors between 1998 to 2003.
Medtronic makes big money off of the products it allegedly pays doctors to endorse. For example, Medtronic made $815 million in 2007 alone off of Infuse, a spinal product, which was the subject of a whistleblower lawsuit. With such enormous profits at stake, it is not surprising that device manufacturers like Medtronic pay fees to doctors and sponsor junkets.
Once again, all of this goes back to the ever-increasing role drug and medical device companies play in our lives. Health care is such a big business (emphasis on business) that the major players like Medtronic will keep shelling out what seems like big bucks for serious ROI. As more Americans become insured under the new health care bill and a whole new market opens for drugs and devices, the pecuniary carrot will be all the more enticing to these companies.
This article is brought to you by the QTT, the epicenter for whistleblowers and people interested in the False Claims Act, Qui Tam Provisions, and Medicare and Medicaid fraud. To discuss a potential case, please call Eric Young at 1 (800) 590-4116.