Arthrex to pay $16M to settle kickback allegations

Spinal Tech

Devicemaker Arthrex agreed to pay $16 million to resolve kickback allegations involving a Colorado orthopedic surgeon, the U.S. Justice Department said Nov. 8.

Arthrex allegedly paid royalties to Peter Millett, MD, for his contributions to the development of the SutureBridge and SpeedBridge products, according to the settlement agreement. But the payments were intended to encourage his recommendation and use of Arthrex products, the Justice Department said.

The alleged arrangement violated the federal anti-kickback statute and the False Claims Act, according to the Justice Department.

Along with the settlement payment, Arthrex entered a five-year corporate integrity agreement with the HHS Office of Inspector General for future compliance measures.

Dr. Millet's lawyer, Marc Kasowitz, said in a statement to Becker's that the DOJ's contentions are "manifestly untrue."

"The truth is that Arthrex properly agreed to pay Dr. Millett, who in his arm's length dealings with Arthrex was represented by legal counsel, royalties for his invention and contributions, which have tremendously improved surgical outcomes for millions of rotator cuff repair patients throughout the world, including some of the most elite athletes in professional sports," Mr. Kasowitz wrote. "Whatever Arthrex’s reasons for entering into its settlement, Dr. Millett unquestionably was entitled to those royalties, and the fact that [the] DOJ has not commenced any action against Dr. Millett confirms that he has never engaged in any improper or illegal conduct."

Arthrex fully cooperated with the investigation, the company's attorney, Jack Pirozzolo, said in an email.

"Like a number of other medical device manufacturers, Arthrex has entered into a settlement agreement with the Department of Justice and the U.S. Department of Health and Human Services-Office of Inspector General to resolve an alleged historical civil claim regarding Arthrex’s collaboration with a healthcare professional," Pirozzolo wrote. "We fully cooperated with the government’s investigation and remain committed to upholding the highest standards of ethical behavior and corporate integrity. This settlement provides stricter government oversight on how we collaborate with the hundreds of surgeons required to design, extensively test and teach other surgeons on the safety and efficacy of our minimally invasive orthopedic surgery products and related surgical procedures."

Note: This article was updated at 4:53 p.m. Nov. 9 to include comment from Dr. Millett's lawyer and Arthrex's lawyer, Jack Pirozzolo.

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