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Settle, Settle, Settle

Written By: Drue De Angelis

In the recent release of their 1st Quarter Financial Results, Wright Medical cryptically references a possible settlement with the DOJ for the ongoing investigation. In anticipation of this settlement, Wright Medical absorbed the loses in the 1st Quarter of 2010. Here is a quick breakdown of how the investigation affected the results of early 2010:

  • $8.0 Million (Management’s estimate) monetary payment for settlement
  • $4.1 Million of expenses related to the U.S. Governmental Inquiries

This investigation has been going on since 2007 so we are sure that Wright Medical is happy to be seeing the light at the end of the tunnel. It seems as though the impact on the investors will be minimal as the settlements is close enough for WMT to disclose the financial terms.

So now we have seen settlements to the DOJ/OIG from: Medtronic, Stryker, Zimmer, Biomet, Orthofix and Wright (am I missing any??). What will this do for the industry? Will the government now move on to the smaller players that may have used the same methods to gain marketshare? Or, assuming that all of these companies continue to play by the rules, has this cloud passed?

As always, we are anxious to hear what you all think. Use our comment system to share with us your thoughts and possibly further enlighten us with information that we may have missed.

Josh Sandberg

Josh Sandberg is the President and CEO of Ortho Spine Partners and sits on several company and industry related Boards. He also is the Creator and Editor of OrthoSpineNews.

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2 Comments

  1. It's anyones guess whether this will bring an end to the investigations or usher in a new round of investigations with the mid-sized companies. One thing is clear is that it is business as usual in the smaller companies. Many are doing business exactly how the big 5 have done it and been punished for. Smaller firms seem to get by under the radar.

  2. It's anyones guess whether this will bring an end to the investigations or usher in a new round of investigations with the mid-sized companies. One thing is clear is that it is business as usual in the smaller companies. Many are doing business exactly how the big 5 have done it and been punished for. Smaller firms seem to get by under the radar.

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