Orthofix to pay $43M to resolve Bone Growth Stimulator Investigation
Orthofix Concludes Bone Growth Stimulator Investigation (press release)
Orthofix International N.V., (NASDAQ:OFIX) (the Company) announced today that it has resolved all matters related to the investigation of its bone growth stimulation business. Consistent with the agreement in principle that the Company previously announced in May 2011, the Company will pay approximately $43 million to resolve all civil and criminal matters, which included a plea to obstruction of a June 2008 federal audit. These charges were previously recorded in the first quarter of 2011. As part of the resolution, the Court imposed a five-year term of probation, during which the Company must continue to comply with the terms of its previously-executed Corporate Integrity Agreement. This final settlement also includes the resolution of a related qui tam complaint filed against the Company, which remains pending against several of its competitors.
President and Chief Executive Officer Robert Vaters commented, “I am very pleased with the final resolution of these matters. Over the last few years, we have made significant investments in compliance and have made many organizational changes to enhance the ethical culture of the Company. Through this transformation we have established an ethical tone at the Company where integrity and commitment to compliance are paramount. Looking forward, I am eager to maintain our leadership position with our Regenerative Stimulation product offering based on providing superior patient outcomes and driving value in the healthcare system.”
The resolution of these matters represents the Company’s third major government investigation settlement this year, following the final resolution of the investigation concerning the Company’s Blackstone Medical Inc. subsidiary and the resolution of the self-reported Foreign Corrupt Practices Act matter announced earlier this year. “I would like to thank our Senior Vice President, General Counsel, Corporate Secretary, Jeffrey Schumm, for his tireless efforts in navigating the Company to the conclusion of each of these difficult investigations,” said Mr. Vaters. “We emerge from these resolutions as a Company deeply committed to the highest levels of integrity and ethics which, along with our unique value proposition for bone repair and regeneration, we believe will position us for continued long term growth.
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