Wright Medical settles
This article was originally published in The Gray Sheet
Executive Summary
Orthopedic device maker Wright Medical enters into deferred prosecution agreement with the U.S Attorney's Office for the District of New Jersey and will pay $7.9 million under a civil settlement with the U.S. government to resolve a federal investigation into alleged improper consulting and professional service agreements with orthopaedic surgeons. Under the settlement, announced Sept. 30, the U.S. Attorney's Office won't prosecute so long as Wright Medical completes certain obligations over the next 12 months. In conjunction with the civil settlement, the firm also has entered into a five-year corporate integrity agreement with the HHS Office of Inspector General. Wright set aside $8 million for a settlement earlier this year. Other major ortho firms previously have settled or otherwise resolved similar charges (1"The Gray Sheet" May 10, 2010)
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Wright expects $8 million settlement
Orthopedic device maker Wright Medical Group set aside $8 million in its 2010 first quarter to cover a "probable" settlement with the U.S. Department of Justice related to an investigation into allegedly improper consulting and professional service agreements with surgeons, the company stated during a May 4 earnings call for the quarter ended March 31. CEO Gary Henley cautions, however, that there is no assurance regarding "if or when" the matter will be finalized. The DoJ investigation came to light in December 2007 (1"The Gray Sheet" Dec. 17, 2007). Earlier in 2007, four major orthopedic firms including Zimmer, J&J/Depuy Orthopedics, Biomet and Smith & Nephew paid a total of $311 million in fines to settle kickback charges related to their hip and knee sales between 2002 and 2006, and a fifth, Stryker, entered a non-prosecution agreement with the government, but was not subject to criminal charges or a costly settlement (2"The Gray Sheet" Oct. 1, 2007)