News Feature | October 31, 2014

Biomet Settles Kickback Lawsuit, Agrees To Pay $6 Million

By Chuck Seegert, Ph.D.

Judge With Gavel

In an agreement that admits no liability, orthopedic giant Biomet agreed to a $6 million settlement with the U.S. Department of Justice (DOJ). Allegations of the lawsuit included the bribing of physician’s office employees to increase sales.

When the Affordable Care Act was signed into law, the Open Payments Program (OPP) was created to give transparency to the financial relationships between healthcare providers and industry. The concern was that caregivers who are financially associated with companies are more likely to use treatments and services from those companies. These kinds of relationships can effect treatment decisions and have the potential to detrimentally affect patient care.

The suit brought by the DOJ against Biomet Inc. and its subsidiary EBI LLC, which does business as Biomet Spine and Bone Healing Technologies, alleged such a relationship. EBI LLC sells bone growth stimulators, bioactive compounds used to non-surgically repair certain bone fractures, according to a recent article from The Journal Gazette (Fort Wayne, Ind.).

The claims focused on a period from 2001 to 2008, when the company allegedly bribed physician office staffers, thus convincing them to use the products, according to the article. The transactions came to light when a former EBI product manager filed a federal whistleblower case against the company.

“Medical device companies must not use improper financial incentives to influence the decision to use their products,” said August Flentje, acting deputy assistant attorney general for the Justice Department's Civil Division, in a statement cited in the article.

While one of the main aims of curbing bribery is to prevent poor decisions related to patient care, another is the prevention of healthcare fraud.

“This settlement demonstrates our resolve in ensuring that patients receive, and the government pays for, health care that is based on sound medical judgment, not compromised by kickbacks,” said Carmen Ortiz, U.S. attorney of the district of Massachusetts, in a statement cited in the article.

In addition to increased transparency and scrutiny related to sales practices, The DOJ has begun to more closely examine cGMPs in an effort to ensure high-quality products are delivered by health care manufacturers.