Wright expects $8 million settlement
This article was originally published in The Gray Sheet
Executive Summary
Orthopedic device maker Wright Medical Group set aside $8 million in its 2010 first quarter to cover a "probable" settlement with the U.S. Department of Justice related to an investigation into allegedly improper consulting and professional service agreements with surgeons, the company stated during a May 4 earnings call for the quarter ended March 31. CEO Gary Henley cautions, however, that there is no assurance regarding "if or when" the matter will be finalized. The DoJ investigation came to light in December 2007 (1"The Gray Sheet" Dec. 17, 2007). Earlier in 2007, four major orthopedic firms including Zimmer, J&J/Depuy Orthopedics, Biomet and Smith & Nephew paid a total of $311 million in fines to settle kickback charges related to their hip and knee sales between 2002 and 2006, and a fifth, Stryker, entered a non-prosecution agreement with the government, but was not subject to criminal charges or a costly settlement (2"The Gray Sheet" Oct. 1, 2007)