Life Sciences

Kickback allegations by former Medtronic attorney revealed

Device Regulation Alert: Safety, Compliance and Reimbursement News, September 29, 2008

Former Medtronic senior legal counsel Ami P. Kelley filed a lawsuit claiming the company offered kickbacks to physicians who used its spinal devices, according to a Wall Street Journal article.

Kelley filed suit in 2002, but the contents of the complaint remain under seal except for a redacted copy. The WSJ obtained a copy of the full complaint last week. According to the WSJ, Kelley claims kickbacks were “pervasive” and included a five-day, all-expenses-paid trip to Alaska. Physicians were supposed to present case studies at the Alaska “think tank” but Kelley alleges little discussion about the cases occurred.

In 2006, Medtronic agreed to a $40 million settlement to resolve Kelley’s allegations and similar ones made in a separate case. However, the second whistleblower is appealing the dismissal of her lawsuit, saying the settlement is too low. There is no clear indication of what would happen to Kelley’s suit if the other lawsuit is reinstated.

Senator Charles Grassley (R-IA) is also investigating whether Medtronic offered incentives for physicians to use its products off label. In addition, Medtronic is facing a federal lawsuit filed by two former company employees, who allege more than 110 U.S. doctors received more than $8 million during 2006 in exchange for using and promoting Medtronic products.

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