Class Action Suit Accuses Zimmer of Kickbacks

In the latest shot fired at orthopedic industry sales practices, a lawsuit against Zimmer Holding and two subsidiaries alleges a “pervasive kickback scheme” by several of the largest manufacturers of hip and knee replacements.

Each of the companies has used phony consulting agreements with orthopedic surgeons and other financial inducements as disguised kickbacks for choosing a particular device, according to the class action suit, which was filed last month in the U.S. District Court for the Southern District of New York.

Earlier this year, Zimmer said it was making changes to its sales practices following a $310 million civil settlement reached last year between a U.S. attorney and five orthopedic companies after an industrywide investigation.

As part of the settlement with the U.S. attorney for the District of New Jersey, Zimmer, Stryker, Biomet, DePuy Orthopaedics and Smith & Nephew entered into 18-month agreements permitting appointed external monitors to oversee contracts between each company and its consulting surgeons. Zimmer also signed a five-year corporate integrity agreement with the Office of Inspector General.

According to the recent suit, Thorpe v. Zimmer, Inc., et al, the federal investigation found Zimmer and the other firms maintained an overwhelming market dominance through an anti-competitive scheme of kickbacks to hip and knee surgeons. However, the suit names only Zimmer and its subsidiaries as defendants.

The company said it has yet to be served with the actual lawsuit so it has not filed any response. It added that the lawsuit is without merit and, if served, it intends to defend itself vigorously.