Medtronic to Pay $9.9 Million to Resolve Improper-Payments Allegations

By TESS STYNES

Medtronic Inc. (MDT) agreed to pay $9.9 million to settle allegations that the company provided illegal payments or services to physicians in order to increase use of the medical-device maker's implantable pacemakers and defibrillators.

According to the Justice Department, Medtronic allegedly encouraged physicians to use its products through several means, including paying physicians to speak at events aimed at increasing referrals, developing marketing/business development plans for physicians free of charge and providing tickets to sporting events.

In a statement, Medtronic said the settlement brings to a close a long-running review of marketing practices between 2001 and 2009 related to sales of pacemakers, defibrillators and other heart-related diagnostic and monitoring devices to physicians.

Medtronic added that it makes no admission that any activities were improper or unlawful and said the company established a reserve for the full anticipated payment in the quarter ended April 25.

The settlement stems from a complaint filed by a former Medtronic employee under the whisteblower provisions of the False Claims Act. The Justice Department said the claims in the settlement are allegations only and there hasn't been a determination of liability.

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