Doctors Allegedly Received Kickbacks from Medical Device Companies

August 2008

Intermedics-McCullough, a Monroeville, PA medical supply company, has filed suit against six out-of-state medical device companies, claiming they made kickback payments to a number of local doctors. The suit, which was filed in Pittsburgh, alleges that payments were made from 1988 to 2007 "for the purpose of gaining exclusive access to the lucrative replacement hip, knee, and joint industry and to the orthopedic industry in general."

The medical device companies in question are Zimmer Inc. and Zimmer Holdings Inc. of Warsaw, Ind.; Stryker Inc. of Kalamazoo, Mich.; Stryker Orthopedics of Mahweh, N.J.; Smith and Nephew Inc. of Memphis, Tenn.; and Biomet Inc. of Warsaw, Ind. Payments ranged from less than $100 to more than $8 million, and more than two dozen doctors are cited in the suit. Last month, it was reported that artificial hip sockets manufactured by Zimmer Holdings were causing severe pain in patients and required additional surgery.

This lawsuit is a result of a New Jersey-based federal investigation done last year of the same companies. While further study into physician conduct is anticipated, Michael Drewniak, a spokesman with the U.S. attorney's office in New Jersey, said that many of the physicians who received payments from the companies had official agreements that allowed them to be compensated for royalties or consulting services.