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Medtronic to Publicize Doctor Payments

Feb 25, 2009 | Parker Waichman LLP Medtronic Inc. said yesterday that it will soon begin disclosing the consulting fees, royalties or honoraria in excess of $5,000 that  it pays to doctors and researchers.  According to the Minneapolis Star Tribune, Medtronic is the largest medical tech company to make such announcement.

The payments made to doctors and researchers by Medtronic and other device makers have been the subject of controversy for some time. For instance, Medtronic has been named in three “whistleblower” lawsuits filed by former employees that alleged the company paid doctors to use Infuse Bone Graft and other Medtronic spine products. Medtronic agreed to pay $40 million to settle two of the cases, but admitted no wrongdoing.

As we reported last month, Medtronic has also come under fire for payments it made to University of Wisconsin researcher Dr. Thomas Zdeblick to develop and promote it’s spine products, including the Infuse Bone Graft.  From 2003 to 2007, Zdeblick told the University that he’d received $20,000 or more from Medtronic. One year, he reported getting $40,000 or more.  But a letter from Sen. Charles Grassley (R-Iowa)  - a frequent critic of the financial relationships between medical firms and doctors - Medtronic paid Zdeblic  anywhere between 2.6 million to $4.6 million in royalty and consulting payments per year during that time.

To quell criticism that such financial relationships lead to conflicts-of-interest, many companies, hospitals, universities and medical associations have begun instituting policies that make such arrangements public.  In a statement released yesterday, Medtronic said it would begin capturing physician payment data for all of its businesses on January 1, 2010 and will publicly report this information annually. The first disclosure will occur in March of 2011 and will address payments made to physicians during calendar year 2010, the statement said.

"Through greater transparency about the nature of these relationships, we will help people better understand how important they are to developing life-saving and enhancing products for patients,'' Medtronic CEO Bill Hawkins said in the statement.

In its statement, Medtronic also said its supported legislation sponsored by  Senator  Grassley and Senator Herb Kohl -  the Physician Payments Sunshine Act - which would require that all medical device manufacturers publicly disclose payments made to physicians for their inventions and assistance in product development, research and training.

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