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Senators probe kickback allegations against Medtronic

This article was originally published in The Gray Sheet

Executive Summary

Sens. Charles Grassley, R-Iowa, chair of the Senate Finance Committee, and Herb Kohl, D-Wis., chair of the Senate Special Committee on Aging, are asking Medtronic to provide details about alleged incentives the company provided to physicians in exchange for the use and promotion of the firm's spine products, including off-label use of the Infuse bone graft replacement. The allegations stem from a 2002 lawsuit by former Medtronic legal counsel Ami Kelley, which was sealed by a federal judge but reported on in September and October by the Wall Street Journal. Among the charges cited by Kohl were "improper, if not illegal, payments by Medtronic to surgeons and physicians." Those cited by Grassley included adding doctors' names to patents and providing royalties for devices they did not help to develop. The lawsuit led to a $40 million settlement agreement between Medtronic and the government, which is being challenged in federal court by former Medtronic travel manager Jacqueline Kay Poteet, who said the amount was too low ("1The Gray Sheet" July 24, 2006, p. 3)

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