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Olympus hit with $6.6 million in scope superbug damages

by Thomas Dworetzky, Contributing Reporter | July 28, 2017
Business Affairs Endoscopy

The Virginia Mason outbreak involved a total of 39 people tied to Olympus scopes. Eighteen died.

Damages assessed by the jury against the manufacturer to Virginia Mason came to $25.4 million originally. But the decision also held the center negligent, and so cut the damages owed.

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The three Olympus executives refused to testify during the trial and took the fifth amendment – Susumu Nishina, Hisao Yabe and Hiroki Moriyama.

Olympus was hit with a massive $646 million resolution of criminal charges and civil claims relating to a scheme to pay kickbacks to doctors and hospitals in 2016. The company agreed to implement compliance changes as part of a deferred prosecution deal.

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.

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.

This came after a raft of lawsuits over the superbug outbreak.

The fine came before revelations that Olympus emails showed that after the outbreak linked to its scopes, it then sought to profiteer off of the supply crisis its bad equipment created — jacking up prices for urgently needed replacement scopes.

Just a few days after the massive settlement, Vincent Hernandez, Olympus Corporation sales manager, emailed Ronald Reagan Medical Center doctors who were desperately seeking loaner scopes, to report that, "supplies are already low, where demand is high with all academic institutions expanding their inventories."

He then offered to sell them 35 new ones for $1.2 million — a whopping 28 percent price boost from just months before, according to the emails that the paper got through a public records request.

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