Fresh from its duodenoscope reprocessing ills, Olympus has just agreed to cough up $623.2 million to resolve criminal charges and civil claims relating to a scheme to pay kickbacks to doctors and hospitals. One of its subsidiaries will also pay $22.8 million to resolve charges related to the Foreign Corrupt Practices Act in Latin America. The company will also implement compliance changes as part of a deferred prosecution deal.

The settlement is the biggest federal anti-kickback deal ever, according to the Wall Street Journal.

“For years, Olympus Corporation of the Americas and Olympus Latin America dropped the compliance ball and failed to have in place policies and practices that would have prevented the substantial kickbacks and bribes they paid,” New Jersey district U.S. Attorney Paul J. Fishman said in a statement. “It is appropriate that they be punished for that. At the same time, the deferred prosecution agreement takes into account the companies’ cooperation and commitment to fully functional corporate compliance.”
Principal Deputy Assistant Attorney General Benjamin C. Mizer noted that the settlement led to "a substantial recovery for taxpayers" and that it also sent "a clear message that we will not tolerate these types of abusive arrangements, and the pernicious effects they can have on our health care system.”

At issue were practices, which Olympus admitted to, of winning new business and rewarding sales by giving doctors and hospitals kickbacks, including consulting payments, foreign travel, lavish meals, millions of dollars in grants and free endoscopes. For example:

• OCA gave a hospital a $5,000 grant to facilitate a $750,000 sale


• OCA held up a $50,000 research grant until a second hospital signed a deal to purchase Olympus equipment


• OCA paid for a trip for three doctors to travel to Japan in 2007 as a quid pro quo for their hospital’s decision to switch from a competitor to Olympus


• A doctor with a major role in a New York medical center’s buying decisions received free use of $400,000 in equipment for his private practice

In the complaint, one Olympus employee noted that the firm had covered physicians' meals, entertainment, golf and spa charges, saying it was "a great way to network, talk business, socialize without our competitors," reported the LA Times.

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