Device makers under scrutiny in international bribery beef

bribery

Federal investigators are looking into payments to foreign physicians by at least three major medical device makers and several pharmaceutical firms, examining whether the practice runs afoul of the Foreign Corrupt Practices Act.

G-men want the skinny on consulting arrangements by companies including Medtronic Inc. (NYSE:MDT), Zimmer Holdings (NYSE:ZMH) and Johnson & Johnson (NYSE:JNJ) with doctors overseas, according to regulatory filings.

Fridley, Minn.-based Medtronic said in an annual filing with the Securities & Exchange Commission that the SEC is expanding an investigation begun in 2007 into "potential violations of the U.S. Foreign Corrupt Practices Act in connection with the sale of medical devices in an unspecified number of foreign countries," adding Turkey, Italy and Malaysia to a list that already included Greece, Poland and Germany. The SEC is seeking "any information concerning certain types of payments made directly or indirectly to government-employed doctors," according to the filing.

Johnson & Johnson, based in New Brunswick, N.J., also revealed a federal probe into its overseas practices, saying it blew the whistle on itself in February 2007, informing the SEC and the U.S. Dept. of Justice that "subsidiaries outside the United States are believed to have made improper payments in connection with the sale of medical devices in two small-market countries, which payments may fall within the jurisdiction of the Foreign Corrupt Practices Act," according to a regulatory filing. Other countries are getting into the act as well, according to JNJ, pursuing the company’s disclosures to the American agencies.

And Zimmer came clean in a filing of its own over a federal probe into its foreign sales operations, as well as a pair of investigations by two state attorneys general.

Kirk Ogrosky, a one-time federal prosecutor who’s now in private practice representing device and drug makers, told the New York Times that the feds are especially concerned about payments to physicians overseeing clinical trials abroad and whether those payments influenced the trials’ outcomes.

“At the Justice Department, investigations that involve allegations of patient harm rise straight to the top and will attract the immediate attention of the F.B.I.,” said Ogrosky, who started and managed the Medicare Fraud Strike Force during his tenure as deputy chief of the DOJ’s criminal fraud division.

Payments and gifts to doctors from the medical device and pharmaceutical industries in the U.S. has been under increasing scrutiny in recent years, with a roster of institutions and states jumping on the so-called “gift ban” bandwagon.

Harvard Medical School became the latest to institute a ban in July, following Johns Hopkins University, which enacted its own rules last April. Boston University School of Medicine is revising its rules and Stanford University School of Medicine and UMass Memorial Medical Center both have strict policies.

Healthcare providers are also getting in on the act. Partners Healthcare, which runs hospitals including Boston’s Brigham and Women’s, Mass. General and the Spaulding Rehabilitation Hospital Network, instituted its own ban in April 2009 and tightened those rules earlier this year.

And states including Massachusetts, Vermont and Minnesota have their own, strict rules; other states are also mulling bans. On the federal level, the healthcare reform act also contains provisions governing industry contact with physicians.

Doctors themselves, however, take a less-dim view of industry-sponsored meals and other “small gifts related to clinical practice," according to a survey of 600 physicians published in the Archives of Surgery earlier this month.

In Massachusetts, a move to roll back the gift ban died on the vine earlier this month, failing to make it into a final omnibus economic development bill on Beacon Hill.

RSS From Medical Design & Outsourcing

  • Molex delivers ISO 13485-compliant, medical-grade surgical cables from its class 100,000 clean room facility
    Molex, LLC operates a fully ISO 146441-1:1999 Class 8-certified clean room, satisfying strict particulate contamination levels specified by ISO-compliant requirements. Located in Thailand, the facility has less than 100,000 particulates (≥0.5µm) per cubic foot of air and manufactures a variety of ISO 13485-compliant medical cables and surgical cables used in operating theatres, hospitals, laboratories and […]
  • Swept-Source OCT: Patent license agreement between Massachusetts General Hospital and Heidelberg Engineering
    Heidelberg Engineering has entered into a patent license agreement with Massachusetts General Hospital (MGH) in Boston. The agreement grants global and exclusive rights to 77 basic patents and patent applications which relate to swept-source OCT technology and its application in ophthalmology. Spectral domain OCT has become indispensable to eye care professionals worldwide to diagnose and […]
  • MIT’s MultiFab presents a stark challenge to incumbent 3D Printer manufacturers’ hardware, software, and business Models
    MIT’s Computational Fabrication Group recently announced the MultiFab, a low-cost 3D printer that can combine up to 10 different resins in one part and also includes a 3D scanning system to identify and fix errors during production. According to Lux Research, these capabilities are rare in commercial 3D printers today due to the manufacturers’ need […]
  • AVX releases Accu-P MP medical grade film chip capacitors for medical devices
    AVX Corporation, a leading manufacturer of passive components and interconnect solutions, has released a new series of thin film chip capacitors specifically designed to meet the demanding performance specifications for implantable medical devices. Delivering extremely tight capacitive tolerances, exceptionally repeatable performance, and remarkably low ESR and high Q at high frequencies—including VHF, UHF, and RF […]
  • RIVANNA commences manufacturing of its Accuro device
    Rivanna Medical announced that it has begun manufacturing its FDA-cleared Accuro device, a handheld and untethered smart-phone-sized device that is designed to guide spinal anesthesia with automated 3D navigation technology in addition to ultrasound imaging of abdominal, musculoskeletal, cardiac and peripheral vascular anatomies. The product will be launched at the ASA annual meeting in San […]
  • FDA seeks public input on Quality Metrics guidance
    by Oliver Wolf, Senior Product Manager, MasterControl In line with the general shift towards risk-driven approaches in the quality management world, FDA is now taking steps towards applying those same principles to its own auditing schedule. At the end of July, the Center for Drug Evaluation and Research (CDER) and the Center for Biologics Evaluation […]
  • First ‘Ear Wear’ for Active Adults Debuts with MDHearingAid FIT
    If you’ve burned out your ears with earbuds, headphones or decades of other audio abuse but aren’t ready for your grandmother’s hearing aids, not to worry! The new MDHearingAid FIT gets you back in the game with a tiny, FDA-registered, one-size-fits-most solution that doesn’t block your ear canal like old-fashioned in-the-ear hearing aids. The FIT feels […]
  • CardioGenics enters into manufacturing agreement with Ontario-based Plasticap
    CardioGenics Holdings, developer for the In-Vitro-Diagnostics (“IVD”) testing market, announced that it has entered into a manufacturing agreement with Plasticap of Ontario, Canada, pursuant to which Plasticap will manufacture CardioGenics’ proprietary self-metering cartridges for its QL Care analyzer. The term of the agreement is three years and the purchase price for each cartridge shall be […]
  • MTD Micro Molding releases micro materials menu
    MTD Micro Molding, a long-time leader in micro-injection molding, has released an updated “Materials Menu” of materials that can be successfully micromolded to help guide engineers at medical device companies. Material selection is a crucial step in product manufacturability. The correct material drives tolerance, dimension, strength, usabality, speed-to-market, design, critical features, and cost. Through MTD’s […]
  • MedTech Chat: Elastic technology for drug delivery
    Dr. Zhen Gu and Dr. Yong Zhu from North Carolina State University are both co-senior authors of a research paper describing their recent work. Dr. Gu, Dr. Zhu and other researchers from North Carolina State University and the University of North Carolina at Chapel Hill have developed a drug delivery technology that consists of an […]
  • B. Braun’s OEM Division offers large bore normally closed low-pressure check valves
    Infusion therapy and pain management device manufacturer B. Braun said today it is offering normally closed large-bore low-pressure check valves through its valve-focused contract manufacturing OEM division. The valves, offered by Bethlehem, Pa.-based B. Braun, are designed for the intermittent injection of fluids during medical treatment and open automatically when pressure is applied. The newly […]

Leave a Reply