The U.S. Justice Department is investigating whether Stryker Corp., the third-largest maker of artificial hips and knees, illegally paid surgeons to induce them to use company products, according to a court filing.
Government lawyers disclosed the scope of the investigation in a lawsuit last week against Stryker. A company subsidiary, Stryker Orthopedics Inc. of Mahwah, signed a non-prosecution agreement last September after cooperating in a separate U.S. probe of whether it paid kickbacks to surgeons who used its products. Prosecutors deferred criminal charges against four Stryker competitors that agreed to pay $310 million.
The Justice Department and the Health and Human Services Department’s Office of Inspector General is probing the nature of $40 million in payments that Stryker made last year to almost 200 physicians through consulting agreements and other financial relationships, according to a government lawsuit which was filed on Aug. 26. “HHS-OIG is investigating allegations that Stryker used such consulting agreements and other financial relationships to unlawfully induce orthopedic physicians” to use Stryker products in surgeries reimbursed by Medicare, according to a memorandum with the lawsuit in federal court in Grand Rapids, Michigan. Katherine Owen, a spokeswoman for Kalamazoo, Michigan-based Stryker, and company attorney Herbert Stern didn’t immediately return telephone calls seeking comment. The government’s complaint followed a Stryker lawsuit filed Aug. 15 in federal court in Newark, New Jersey, seeking to quash a Feb. 22 subpoena demanding documents.
Those documents relate to Stryker’s financial relationships with surgeons, its marketing and sales budgets for orthopedic devices, and its corporate structure relating to interactions with doctors.