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Stryker Deferred Prosecution Agreement

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The press release states that civil law publications “resolve claims under the Anti-Kickback Act and the Federal Civil Law Act on False Claims.” In summary, the settlement agreement states that “the United States asserts that some of these financial agreements were inappropriate, that the compensation paid under this agreement was inappropriate and/or illegal, and that these agreements inciting hospitals and physicians to file false and fraudulent allegations… Thus, it seems that the false Claims Act theory follows behind these comparisons cases where the government has claimed that accusations of anti-kickback necessarily lead to false claims, a theory that is not tested in a comparison. The OtisMed advocacy agreement with the government contains a side agreement with Stryker, in which the government promises not to sue Stryker. In this agreement, Stryker commits to verify and verify whether other marketed devices are authorized by the FDA and to share the results of this audit with the government. Stryker also accepts annual certifications from the President of Stryker`s Orthopedic Group and Stryker`s Board of Directors for the effectiveness of the compliance program. On September 27, 2007, the government accused companies of using consulting contracts with orthopedic surgeons to induce the use of a company`s artificial hip and knee reconstruction and replacement products. The investigation showed that this was a common practice of enterprises between at least 2002 and 2006. Surgeons who had agreements with companies were typically paid $10 to $0,000 a year for consulting contracts and were often inundated with travel and other expensive benefits. What is common to all five cases is that each of the companies entered into consulting agreements with orthopedic surgeons, under which the companies paid to incentivize surgeons to use that company`s hip and knee replacements. “The monitors hired by companies have been instrumental in fully integrating the objectives and requirements of the agreements into companies` business practices,” Marra said. “These changes will ensure that medical advisors are not retained for the volume of their business, but for the legitimate advisory services they can provide. All of these changes were made at no cost to taxpayers.

Last but not, patients are better served, knowing that their doctors will make decisions in the best interests of patients and not in the financial interests of physicians. “A fifth company, Stryker Corp.`s SYK, +1.26% Stryker Orthopedics Inc., voluntarily cooperated with prosecutors and agreed to enter into a non-criminal pact. Stryker, who also agreed to pass reforms and submit to corporate surveillance for 18 months, failed to reach a civil agreement with the government. In a press release, the U.S. Attorney`s Office in Newark, N.J., said Zimmer Inc. ZMH, +3.10%, Johnson & Johnson`s JNJ, +2.64% Depuy Orthopaedics, Biomet Inc. BMET and Smith & Nephew Inc. SNN, +1.75% have entered into deferral agreements in which they will avoid prosecution on a conspiracy charge if they implement industry reforms and complete 18 months of corporate oversight. NEWARK (MarketWatch) — Four medical device makers have struck deferred lawsuit agreements and agreed to pay $US 311 million to settle criminal and civil investigations into allegations they bribed surgeons to use their products, prosecutors said Thursday. The Prosecution claimed that the four companies that had entered into deferral agreements paid in consulting agreements with orthopaedic surgeons incentives to use a company`s artificial hip and knee reconstruction products.

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