The five companies account for almost 95 percent of the market in hip and knee implants. Four will pay a total of $310 million; all agreed to be monitored. The amounts were based on market share. "This investigation uncovered evidence that health care decisions were being made based on a doctor's wallet and not on a patient's well-being," says Weysan Dun, the agent in charge of the FBI's New Jersey division, told the Associated Press. [Separately, J&J's DePuy won $226 million from Medtronic in a patent-infringement trial over spinal screws. Look here].
The US Attorney, Christopher Christie, says the companies paid orthopedic surgeons huge amounts of money to be consultants and exclusively use their products, but that patients and hospitals weren't told of the relationships.
He wouldn't say if any docs would be charged in the continuing investigation, but did say that no company employees were being charged at this time. Some docs, Christie says, were paid "hundreds of thousands" of dollars but that only a minority of the consulting contracts companies had with surgeons were considered improper. (This is Christie's statement).
Biomet will pay $26.9 million; DePuy, $84.7 million; Smith & Nephew, $28.9 million; Stryker will not be paying any money; and Zimmer will pay $169.5 million and be monitored by former US Attorney General John Ashcroft. The U.S. Department of Justice began investigating the industry in 2005 regarding concerns that companies may have paid kickbacks to orthopedic surgeons in return for favoring their products.
In July 2006, another medical device maker, Medtronic Inc., agreed to pay $40 million to settle civil allegations that it paid kickbacks to doctors. The allegations dealt with its Memphis subsidiary Medtronic Sofamor Danek, which makes implants used in back surgery to stabilize a patient's spine. The government said that between 1998 and 2003, Medtronic paid kickbacks that included sham consulting fees, bogus royalty payments and trips to tourist destinations. Medtronic denied any wrongdoing in the settlement.
Coincidentally, Biomet was acquired Tuesday for $11.4 billion by a consortium of private equity firms and ceased trading on Nasdaq.