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Medtronic pays $9.2M to settle South Dakota kickback case

SIOUX FALLS, S.D. (AP) — Minnesota-based Medtronic has agreed to pay $9.2 million to resolve allegations that it paid kickbacks to a South Dakota neurosurgeon and failed to accurately report them, the Department of Justice announced Thursday.

The settlement resolves allegations that Medtronic paid for more than 100 social events at a restaurant owned by Dr. Wilson Asfora, at Asfora’s request. Medtronic allegedly sponsored the events over a nine-year period to persuade Asfora to use Medtronic products, namely its SynchroMed II intrathecal infusion pumps, which are implantable devices used to deliver medication to patients.

Medtronic admits no liability in the settlement. The Department of Justice said Medtronic cooperated with the investigation and took remedial action against those allegedly involved, including firing a sales representative and sales manager and disciplining 12 other employees.

“Outside of a small number of sales employees, DOJ’s investigation did not find that Medtronic was aware of this alleged misconduct at the time it occurred,” Medtronic spokesman Ben Petok said in a statement. “Upon investigation of this conduct, which violated the company’s policies, Medtronic took various remedial steps, including termination and other disciplinary action against employees directly or peripherally involved, and enhancing relevant training.”

Asfora and two of his other companies are defendants in a separate case alleging he received kickbacks to use certain implants in his spinal surgeries. An attorney for Asfora said he had no comment at this time.

“We expect doctors to make medical decisions based on what is best for their patients, not what is best for their bank accounts,” South Dakota U.S. Attorney Ron Parsons said in a statement. “The quality of medical care is eroded – and patients and their families suffer – when companies and physicians enter into these sorts of under the table schemes to create illegal financial incentives to increase the use of medical devices.”

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