DOW JONES NEWSWIRES Medtronic Inc. (MDT) has agreed to pay $23.5 million to resolve allegations that it paid illegal kickbacks to physicians who participated in its post-market studies and device registries to induce doctors to implant the company's pacemakers and defibrillators, the Department of Justice said Monday. The U.S. contends that Medtronic, a medical-device maker, solicited physicians for its studies and registries to convert their business from a competitor's product and to persuade the doctors to continue using Medtronic products. Post-market studies assess the clinical performance of a medical device or drug after it has been approved by the Food and Drug Administration. Registries are collections of data maintained by a device manufacturer concerning its products that have been sold and implanted in patients. The U.S. alleges Medtronic caused false claims to be submitted to Medicare and Medicaid by using two post-market studies and two device registries as the vehicle to pay participating physicians illegal kickbacks. Although Medtronic collected data and information from participating physicians, each of the studies and registries required a new or previous implant of a Medtronic device in each patient and the company allegedly paid physicians a fee of approximately $1,000 to $2,000 per patient. "Patients who rely on their healthcare providers to implant vital medical devices expect that those decisions will be made with the patients' best interests in mind," said Tony West, assistant attorney general for the Civil Division. "Kickbacks, like those alleged here, distort sound medical judgments with financial incentives paid for by the taxpayers." A representative from Medtronic was not available for immediate comment. The settlement resolves allegations contained in two whistleblower lawsuits. As part of the settlement, the whistleblowers will receive payments totaling more than $3.96 million from the federal share of the recovery. Shares closed at $35.45 Monday and were unchanged after hours. The stock is up 5.6% in the past three months. -By Nathalie Tadena, Dow Jones Newswires; 212-416-3287; nathalie.tadena@dowjones.com
