The medical equipment arm of Tokyo-based Olympus was slapped with $623.2 million in penalties by the U.S. Department of Justice (DOJ) related to kickbacks paid by units in the Americas in the marketing of devices that stretches back to 2011.Olympus facility in Bartlett, TN
Reuters reported that the case covered criminal and civil violations by Olympus of the Americas and Olympus Latin America of payments to doctors and others that aided sales of $600 million and brought in gross profits of $230 million, citing the DOJ.
In February of last year, Olympus said allegations that its sales representatives may have violated a pair of federal laws governing kickbacks and false claims in marketing its medical devices were part of discussions with U.S. authorities and warned the company's operations could be "materially adversely affected."
Reuters cited an example provided by the DOJ of a doctor who was involved in purchase decisions for a major medical center in New York receive free use of $400,000 in equipment from Olympus for his private practice.
"Such relationships can improperly influence a provider's judgment about a patient's health care needs, result in the use of inferior or overpriced equipment, and drive up health care costs," Principal Deputy Assistant Attorney General Benjamin Mizer of the DOJ's Civil Division said in a statement cited by Reuters.
The fines come as Olympus moves to handle fallout from federal probes and lawsuits linked to duodenoscopes that are suspected as the source of drug-resistant bacteria outbreaks at U.S. hospitals caused by poor cleaning procedures and design flaws. Other companies, Pentax and Fujifilm, are also under the scanner for the same issues.
In the sales fraud case, Olympus Corp of the Americas will pay a $312.4 million criminal penalty and an additional $310.8 million in civil claims, according to Reuters.
Still, the company can avoid conviction in the cases by meeting mandated reforms in operations set out by the DOJ.