After much pressure from Congress, medical device maker Medtronic announced today that the company will collect payment data on all physicians for annual disclosures. The first report, which will detail payments made beginning January 1, 2010, will be publicly available in March of 2011. A third party company will be hired to audit the information.
The Fridley, MN-based company said it will report all consulting fees, royalties and hororaria for physicians who receive payments of $5,000 or more per year--much higher than the $500 cap proposed in legislation backed by AstraZeneca, Eli Lilly and Glaxo, among others.
Medtronic has been under the spotlight since 2006 when it settled with the federal government for $40 million following accusations from whistleblowers that the company paid kickbacks to doctors to use its devices. Since then, the company has been under investigation for payments to a number of doctors. It was revealed last September that the company was sued in 2002 for also providing a number of other incentives to doctors, including trips to a gentlemen's club and Alaska, as well as patent royalties.
Most recently, Senator Charles Grassley initiated an investigation into Medtronic's financial dealings with Thomas Zdeblick--a surgeon and researcher at the University of Wisconsin. Zdeblick received more than $19 million in largely undisclosed payments from Medtronic to develop and promote the company's spine products.
Medtronic also revealed that plans are underway to restructure. CEO Bill Hawkins told employees today that the company plans to reduce its workforce this year, with the official announcement to come in May. Although he revealed that the cuts will be worldwide, no further details were provided regarding layoffs.
Company spokesperson Steve Cragle said cost-cutting initiatives have already begun, including travel restrictions and a 5 percent cut in executive pay. "We wanted to let employees know that this type of action may be required," Cragle said. "We've already implemented a number of initiatives essentially to limit our overall expense growth, and to reduce any impact of a reduction in force on our employees." Medtronic employs 38,000 people worldwide.
- check out the Medtronic release
- more on Medtronic's job cuts