Another Physician Kickback Scheme Exposed

Last week, I reported on a whistleblower lawsuit that described a scheme involving Genentech/Biogen payments to physicians to promote the off-label use of a pricey biotech drug. Today's New York Times has long report on another salesman-turned-whistleblower lawsuit, this time involving the medical device industry.

According to the suit, Medronic paid hundreds of thousands of dollars to back surgeons to promote the use of spinal implants, a particularly lucrative part of the $10 billion company's business. In addition to the huge payments, which may have totalled $50 million, all the usual accoutrements of medical marketing were involved: golf trips to fancy resorts; free snorkeling; and all-expense paid visits to strip clubs. Talk about bedside manner.

Despite the fact the government (Medicare, Medicaid) is the largest financial victim of what the suit referred to as a "bribery scheme," the Bush administration's Justice Department has refused to intervene in the case.

Whistleblower lawsuits brought under the Civil War-era False Claims Act allow plaintiffs to recover funds fraudulently obtained through federal contracts. The whistleblower usually gets about a third of the recovery, with the rest going to the federal treasury.