Earlier this year, Stryker informed investors in a Securities and Exchange Commission (SEC) filing that the Justice Department’s Criminal Division was investigating the corporation for “possible violations of the Foreign Corrupt Practices Act.” That law prohibits U.S. companies from paying bribes overseas.
Stryker disclosed the Justice Department probe in its annual SEC report in February. It said Justice had requested documents from Jan. 1, 2000, to the present, regarding suspected violations of federal criminal and antitrust laws.
In the initial U.S. inquiry, prosecutors said financial inducements were offered to U.S. physicians in the form of consulting agreements with hundreds of surgeons, who did little or no work in return but did agree to use the paying company’s products exclusively.
The physicians, prosecutors said, also failed to disclose the existence of the relationships with the companies to the hospitals where the surgeries were performed and to the patients they treated.
More than 700,000 hip and knee replacement surgeries are performed in the U.S. each year. About two-thirds of those are for patients covered by Medicare.
According to its SEC filing, Stryker disclosed that SEC investigators had made an informal inquiry of the company regarding suspected violations of the Foreign Corrupt Practices Act in connection with the sale of medical devices in certain foreign countries and that was followed by a subpoena from the Justice Department.
In the lawsuit, Stryker said it is “fully cooperating” with the Justice Department and the SEC and that it had turned over to investigators more than 300,000 pages of hard copy, multiple compact discs and a digital video disc with myriad election information. It said the data contain “overwhelming and convincing evidence of Stryker’s innocence,” but that the Justice Department was continuing its investigation.