Arthrex Pays Out $16 Million To Resolve Kickback Allegations

FJ Thomas

Sarasota, FL ( – Global Florida-based medical device company Arthrex is no stranger to the orthopedic arthroscopic world. A leader in innovation, according to their website the company develops over 1,000 new procedures and medical devices each year.

One of those ground-breaking surgical systems is the SutureBridge and SpeedBridge, which is used in surgery to re-attach the Achilles tendon. The SutureBridge device allows a larger area hourglass shaped FiberWire to be placed over the end of the tendon, which creates greater stability. The SpeedBridge enables the use of hourglass shaped FiberTape over the end of the tendon. Both products help to create a greater area of compression of the Achilles tendon on the calcaneus, increasing stability and improving outcomes.

Recently, Arthrex agreed to pay out $16 million to resolve False Claims Act allegations involving the SutureBridge and SpeedBridge surgical devices, according to a news release from the U.S. Department of Justice. The suit states that Arthrex paid royalty payments for a period of 11 years starting in 2010, to Colorado surgeon Dr. Peter Millet for his part in creating the surgical devices, but alleges that the payments were actually incentive kickbacks to increase his use of Arthrex’s products.

In 2006, Millet had appealed to Arthrex for royalties. The suit contends that Arthrex denied the request and Millet countered with his alignment of a device competitor, at which point Arthrex agreed to payout of millions for past and future sales at a rate much higher than their standard royalty rate.

Both attorneys released statements to Becker’s in response to the recent settlement. Millet’s attorney Marc Kasowitz contends that the allegations are absoulutely untrue – as further supported by the lack of legal action against Millett. Arthrex’s attorney Jack Pirozzolo says the company fully cooperated with the investigation with a focus on ethical behavior and integrity, and that the case provides stricter government oversight in their relationships.

In a separate case, long time contributor Dr. Stephen S. Burkhart of San Antonio Texas filed suit against Arthrex in 2019 for failure to pay royalties, underpayment of royalties, and lack of acknowledgement for his contributions to their product lines. Burkhart filed the suit after an audit allegedly revealed he wasn’t paid royalties on hundreds of Arthrex products. While Arthrex did concede that they confirmed royalties were due to Burkhart on 417 products, they denied any of the other allegations.

Arthrex, as well as many other surgical device companies, heavily rely on physician expertise and involvement in product development. Considering the complexities involved in such relationships, it will be interesting to see how these cases may impact the future of surgical technology.