IBJNews

Device maker Biomet paying $22.7M to settle bribery case

Back to TopCommentsE-mailPrintBookmark and Share

Medical device maker Biomet Inc. has agreed to pay $22.7 million to settle U.S. criminal and civil allegations that it bribed government-employed doctors in Argentina, Brazil and China for more than eight years to win business with hospitals.

The Justice Department and the Securities and Exchange Commission announced the settlements Monday with Warsaw-based Biomet. The company will pay a $17.3 million criminal penalty but won't be prosecuted by the Justice Department if it institutes strict internal controls to prevent bribery and hires an expert to monitor its compliance for 18 months. Biomet, which operates in about 90 countries, also agreed to pay $5.4 million in restitution to resolve the SEC's civil charges.

Biomet is the third medical device company to pay a criminal penalty and sign a deferred-prosecution agreement in the government's investigation into bribery by medical device makers of doctors employed by governments overseas.

That investigation continues, the government agencies said.

In a similar case last April, health care giant Johnson & Johnson agreed to pay $70 million to settle criminal and civil charges of bribing doctors in Europe and paying kickbacks to the Iraqi government to obtain business. And British orthopedics maker Smith & Nephew agreed last month to pay $22.2 million to resolve allegations that it bribed doctors employed by the Greek government.

Biomet makes products used mostly by orthopedic surgeons for procedures like hip or knee implants. The government accused the company of violations of the Foreign Corrupt Practices Act in Argentina, Brazil and China from 2000 to August 2008. The law prohibits bribery of foreign government officials or company executives to secure or retain business.

Employees and managers at all levels of the parent company and four subsidiaries were involved, along with distributors who sold Biomet products, the government said. It said Biomet's internal watchdog employees failed to halt the illegal bribes to doctors although they knew about them.

"A company's compliance and internal audit should be the first line of defense against corruption, not part of the problem," Kara Brockmeyer, the head of the SEC enforcement division's unit that deals with foreign bribery cases, said in a statement.

Some emails described the way that device vendors would deliver cash to surgeons after they finished operating, and others discussed the amounts of bribes, according to the government.

Biomet President and CEO Jeffrey Binder said the company has "significantly enhanced" its compliance procedures and financial controls in recent years.

"Moving forward, we intend to continue to adhere to our enhanced global compliance procedures and to promote the company's commitment to the highest ethical standards in all the markets that we serve," Binder said in a statement.

The Justice Department said it acknowledged that Biomet had cooperated in the investigation and had taken corrective action. In addition, the amount of the criminal penalty takes into account Biomet's cooperation in the investigation of other companies and individuals, Justice said.

ADVERTISEMENT

  • biomet hip implants
    A study in the journal of bone and joint surgery studied patients Biomet's m2a magnums and found pseudotumors in 40% of them. The problem applies to all metal on metal implants, but the news won't be helpful for Biomet
  • I agree with Trey1
    Try this website for research on the money flowing to doctors from Pharmaceutical and Device Companies. This money costs you and me every time we visit our doctor. You will hear the companies claim that these physicians are retained for research and development or other internal needs, but I have always referred to it as a bribe.

    http://projects.propublica.org/docdollars/
  • How about in the U.S.?
    The big implant makers have traditionally paid lucrative "consulting" fees to U.S. orthopedic surgeons who use their stuff. Is that really any different?

    Post a comment to this story

    COMMENTS POLICY
    We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
     
    You are legally responsible for what you post and your anonymity is not guaranteed.
     
    Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
     
    No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
     
    We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
     

    Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

    Sponsored by
    ADVERTISEMENT

    facebook - twitter on Facebook & Twitter

    Follow on TwitterFollow IBJ on Facebook:
    Follow on TwitterFollow IBJ's Tweets on these topics:
     
    Subscribe to IBJ
    1. So much for Eric Holder's conversation about race. If white people have got something to say, they get sued over it. Bottom line: white people have un-freer speech than others as a consequence of the misnamed "Civil rights laws."

    2. I agree, having seen three shows, that I was less than wowed. Disappointing!!

    3. Start drilling, start fracking, and start using our own energy. Other states have enriched their citizens and nearly elminated unemployment by using these resources that are on private land. If you are against the 'low prices' of discount stores, the best way to allow shoppers more choice is to empower them with better earnings. NOT through manipulated gov mandated min wage hikes, but better jobs and higher competitive pay. This would be direct result of using our own energy resources, yet Obama knows that Americans who arent dependent of gov welfare are much less likely to vote Dem, so he looks for ways to ensure America's decline and keep its citizens dependent of gov.

    4. Say It Loud, I'm Black and Ashamed: It's too bad that with certain "black" entertainment events, it seems violence and thuggery follows and the collateral damage that it leaves behinds continues to be a strain on the city in terms of people getting hurt, killed or becoming victims of crimes and/or stretching city resources. I remember shopping in the Meadows area years ago until violence and crime ended make most of the business pack you and leave as did with Lafayette Square and Washington Square. Over the past 10 to 12 years, I remember going to the Indiana Black Expo Soul Picnic in Washington Park. Violence, gang fights and homicides ended that. My great grandmother still bears the scares on her leg from when she was trampled by a group of thugs running from gun fire from a rival gang. With hundreds of police offices downtown still multiple shootings, people getting shot downtown during Black Expo. A number of people getting shots or murdered at black clubs around the city like Club Six on the west side, The Industry downtown, Jamal Tinsley's shot out in front of the Conrad, multiple fights and shootings at the skating rinks, shootings at Circle Center Mall and shooting and robberies and car jackings at Lafayette Mall. Shootings and gang violence and the State Fair. I can go on and on and on. Now Broad Ripple. (Shaking head side to side) Say It Loud, I'm Black and I'm Ashamed.

    5. Ballard Administration. Too funny. This is the least fiscally responsive administration I have ever seen. One thing this article failed to mention, is that the Hoosier State line delivers rail cars to the Amtrak Beech Grove maintenance facility for refurbishment. That's an economic development issue. And the jobs there are high-paying. That alone is worth the City's investment.

    ADVERTISEMENT