Medtronic (NYSE:MDT) made the final payment in the $11.1 million settlement of a 2009 lawsuit alleging that it ran a kickbacks scheme to induce physicians to use its cardiac rhythm management products, but admitted no wrongdoing in the agreement.
The lawsuit, filed by former Medtronic business development manager Adolfo Schroeder, alleged that the Fridley, Minn.-based medical device company paid doctors to speak at conferences, created free marketing and business plans and gave them free tickets to sporting events, restaurants and even strip clubs.
In May, Medtronic agreed to pay $9.9 million to settle a portion of the lawsuit with prosecutors in California; the company had already paid $844,800 in 2012 to settle another portion of the case, according to the office of Eric Schneiderman, the U.S. Attorney General for New York. The agreement announced yesterday involves 46 states and the District of Columbia, which will split $362,362 among their respective Medicaid programs, according to a press release.
The most recent settlement "concludes the investigation concerning Medtronic based on the allegations brought by Mr. Schroeder," according to the release.
"Physicians should determine the best course of treatment for their patients based on sound medical judgment, not on any special treatment that they may receive from a manufacturer," Schneiderman said in prepared remarks. "Such conduct puts patients at risk and unfairly impacts those companies that follow the law. My office will vigorously pursue health care companies that try to improperly influence health care professionals."
Schroeder will receive roughly $1.7 million from the settlement, according to the U.S. Justice Dept.