Medtronic pays $51 million to DOJ to settle claims of purchased companies

A medtech company has agreed to pay close to $51 million to the US Department of Justice (DOJ) to resolve three separate claims.

Medtronic settled the claims against Covidien and ev3 who are now part of the company but did plead guilty to one misdemeanour.

A compromise agreement of $13 million was paid to resolve the DOJ’s investigation into the Systematic Evaluation of Patients Treated With Stroke Devices for Acute Ischemic Strokes (STRATIS) Registry but makes no admission the registry was improper or unlawful.

A further compromise settlement of $20 million was paid to resolve the investigation into market-development and physician engagement activities conducted by Covidient and ev3 Peripheral Vascular and endoVenous businesses – again emphasising no admission that the activities were improper or unlawful.

Medtronic’s ev3 did plead guilty to a matter regarding the Onyx Liquid Embolic System (Onyx) and make a payment of $17.9 million, as well as adopt new compliance and reporting terms for three years. It was acknowledged that Medtronic and Covidien had no prior knowledge or involvement with any of the conduct that formed the basis of the charge – which took place between 2005 and 2009 – prior to Covidien’s purchase of ev3 in 2010.

In its statement, Medtronic said: “Medtronic is committed to maintaining the highest standards of ethical conduct and compliance with all applicable regulatory guidelines. The plea agreement and settlements that the Medtronic entities agreed to all concern matters that took place either largely or entirely prior to Medtronic acquiring the businesses in which the activities took place. Medtronic has made significant investments in ensuring that it fulfils its obligations to all of its stakeholders and to do business the right way.

“It is also important to note that the government agrees that upon acquisition of Covidien and ev3, Inc. and without prompting or direction from the United States, Medtronic initiated additional compliance measures to prevent potential violations of the FDCA by ev3, Inc. and its employees.

“Medtronic cooperated fully with the Department of Justice during its investigation, and we believe our ongoing, rigorous compliance programs and ethical practices enabled us to reach a fair resolution of these cases. We are pleased to put the matters behind us and will continue to fulfil our Mission to alleviate pain, restore health and extend life for millions of people around the world.”