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Stryker files suit against DOJ, OIG

Device Regulation Alert: Safety, Compliance and Reimbursement News, September 1, 2008

Stryker Corp. is suing the Department of Justice (DOJ) and Office of Inspector General (OIG) for issuing an “oppressive and overly broad” subpoena, according to a CNNMoney.com article.

According to the complaint, the DOJ and OIG are seeking a broad range of documents related to Stryker’s sales and marketing activities. The government is reportedly investigating Stryker for allegedly submitting false or otherwise improper Medicare and Medicaid reimbursement claims, and potentially violating anti-kickback and self-referral laws that apply to physicians.

Stryker said it has turned over 300,000 pages of information that prove its innocence, but the DOJ continued its investigation.

In October 2007, four major medical device manufacturers—Zimmer Holdings, Inc., DePuy Orthopaedics, Inc., Biomet, Inc. and Smith & Nephew, Inc.—paid the government a combined $311 million to resolve allegations they provided kickbacks to surgeons through consulting deals to induce purchases. They signed deferred prosecution agreements (DPA) and obtained a release protecting them from further investigation and prosecution. The DOJ and OIG are reportedly not continuing to investigate the other companies.

Stryker, however, cooperated with the government investigation and signed a non-prosecution agreement (NPA) without paying a fine. The NPA apparently does not protect Stryker from additional investigation, as a DPA would. In its suit, Strkyer argues it should be not be prosecuted because of the NPA.

In addition, Styker is being investigated for allegedly violating the Foreign Corrupt Practices Act. The company has also received three FDA warning letters related to various issues at company facilities.

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