King Lawsuits Highlight Kick-Back Practices Among Companies
In a new twist on an already horrendous medical malpractice case, two medical device and surgical material companies are facing possible financial penalties because of their relationship with John A. King, an osteopathic surgeon with 124 medical malpractice lawsuits filed against him. Wright Medical Technology Inc. and EBI Inc. are two of several medical device companies under investigation by the U.S. Department of Justice. Wright Medical Technology Inc. is mentioned in 33 lawsuits for their bone-fusion material that failed to work during two experimental studies performed on rats and rabbits, but was used on King’s patients. Five of Wright Medical’s competitors have reached settlements with the DOJ about using “sham contracts and other kickbacks to persuade surgeons to choose their goods.” EBI Inc. is mentioned in 38 lawsuits involving spine-stimulating devices King used during surgeries. EBI allegedly paid King a bonus each time he inserted one of their Ionic Spacers into a patient’s spine. The spacers have never been successfully used in animals or humans to replace diseased or damaged vertebral disks. According to a released complaint, payments and kickbacks, in the guise of cash payments, travel benefits, entertainment and other benefits, given to physicians such as King are “frequently disguised as consultancies.” Wright Medical, in its 10K report filed on Feb. 23, stated, "We are subject to various federal and state laws concerning health care fraud and abuse, including false claims laws and anti-kickback laws." An SEC report added that,
“allegedly our products had not been properly cleared by the FDA and that we failed to warn that our products were not safe for their intended use and that we knew that Dr. King was not properly trained or was performing the surgeries inappropriately.”EBI also reported that it already had agreed to pay the DOJ $26.9 million to settle some of those anti-kickback charges.
“We, like other companies in the orthopedic industry, are involved in ongoing investigations by the U.S. Department of Justice, the results of which may adversely impact our business and results of operations," EBI added. It isimportant to note that King’s patients were never informed of the experimental nature of the devices implanted in their bodies.
