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Zimmer, Depuy, Biomet, Smith & Nephew and Stryker Settle DOJ Investigation for $311 million BY LAUREN UZDIENSKI, SEPTEMBER 27, 2007

Federal prosecutors announced today the terms of a settlement with Zimmer, Depuy, Biomet, Smith & Nephew and Stryker following an investigation into physician kickbacks.

Zimmer, Depuy, Biomet and Smith & Nephew entered into deferred prosecution agreements (where a company can avoid indictment if they consent to reforms and monitoring) and will agree to industry reforms in addition to paying a combined total of $311 million. Zimmer announced that they will pay $169.5 million of that sum; additionally, J&J will pay $84.7 million, Smith & Nephew $28.9 million and Biomet $26.9 million.

Only Stryker avoided monetary penalties. SYK will enter a non-prosecution pact and, like the other four companies, agree to industry reforms and undergo corporate monitoring for 18 months.

Even as this investigation winds down, physician compensation worries may be far from over for the industry. Just this morning, the New York Times reported that Sen. Charles Grassley (R-Iowa) sent Medtronic, who settled an investigation into alleged kickbacks in 2006, a letter inquiring about consulting payments to surgeons in the time since that investigation.

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