Medtronic Inc. (NYSE:MDT) began its voluntary quarterly reporting of payments to doctors, saying it spent $15.7 million on royalties and consulting fees during the first quarter.
The Minneapolis-based device monolith is ahead of the curve in reporting the payments, as a federal law mandating such disclosure is set to go into effect by 2013. Industry payments to physicians have attracted increased scrutiny from lawmakers and regulators, who fear that the funds constitute a de-facto "pay-to-play" system, with Medtronic drawing a fair share of the attention in recent years for payments to orthopedic surgeons.
Medtronic reported making payments of more than $5,000 to 227 doctors and doctors’ groups during the quarter. Payments less than $5,000 weren’t reported. Of the $15.7 million, the vast majority, $14.2 million, went to orthopedic surgeons and specialists, according to the Wall Street Journal.
The largest recipient was Tennessee orthopedic surgeon Kevin Foley, who was paid $3.97 million in the quarter for spine-surgery inventions such as surgical plates, rods and screws.
“As an industry leader, Medtronic wants to be at the forefront of helping to establish best practices that will enhance patient and public confidence in the collaborative model,” CEO Bill Hawkins said in prepared remarks.
Sen. Herb Kohl (D.-Wis.) praised the company’s decision to “stay ahead of the transparency curve,” according to the statement.
In 2006, Medtronic agreed to a $40 million settlement two federal lawsuits alleging that it paid kickbacks to physicians in exchange for using its spinal products