Medtronic Resolves Qui Tam Suits

MINNEAPOLIS - Medtronic Inc. announced in a press release that it has reached a settlement agreement with the US Department of Justice which requires the government to seek dismissal of two qui tam civil suits pending against Medtronic for several years in the Western District of Tennessee.

The two suits are based upon allegations about certain sales and marketing practices in the Spinal business. The settlement agreement reflects Medtronic’s assertion that the company and its current employees had not engaged in any wrongdoing or illegal activity.

To resolve the matter, Medtronic has entered into a five-year agreement that further strengthens its employee training and compliance systems surrounding sales and marketing practices and will pay a $40 million civil settlement into escrow pending dismissal of the related lawsuits.  Medtronic will record a one-time charge in its current first quarter ending July 28, 2006 to account for the payment.  The lawsuits are not related to product quality, safety or efficiency and do not affect the company’s ability to produce or sell any product or service.

“Medtronic has cooperated fully with the Government during its investigation of the allegations, and we believe that our company-wide efforts regarding business conduct and ethical practices assisted us in achieving a practical resolution of these cases,” said CEO Art Collins of Medtronic.  “We believe the settlement, which puts this litigation behind us, will allow us to continue to direct our efforts at delivering life-saving and enhancing therapies to patients around the world,” he explained.

Collins concluded, “We realize that any organization may be judged by the actions of a few.  We expect every Medtronic employee to adhere to high ethical standards at all times, and our compliance systems are designed to ensure compliance as our industry evolves.”

Medtronic Inc. is the global leader in medical technology, restoring health and extending life for millions of people around the world.