Medtronic pays out €4m to settle US lawsuit
Dublin-headquartered Medtronic has agreed to pay $4.4m (€4m) to settle a US lawsuit accusing the company of passing off Asian medical devices to the American military as made in Tennessee.
The US government alleged that Medtronic, along with affiliated companies Medtronic Inc, Medtronic USA Inc and Medtronic Sofamor Danek USA Inc, sold products to the US Veterans Affairs Department and the Department of Defense that were made in China and Malaysia after certifying they were made in the US or other designated countries.
The Trade Agreements Act of 1979 generally requires companies that sell products to the government to manufacture them in the US or another designated country, according to the Department of Justice.
The lawsuit said that the equipment was sold to the US Department of Defense and the US Department of Veteran Affairs during an eight-year span from January 2007 until September 2014.
The US Justice Department said in a statement: "The United States alleged that Medtronic sold to the United States products manufactured in China and Malaysia, which are prohibited countries under the TAA (Trade Agreements Act)."
Medtronic recently became Ireland's largest company when it completed its $49.9bn acquisition of Dublin-domiciled surgical supplies group Covidien earlier in the year and moved its corporate headquarters to Ireland in a new holding company, Medtronic plc.
A spokesman for Medtronic said: "Medtronic makes no admission that any of its activities were improper or unlawful.
"This resolution focused on a limited number of accessories and surgical instruments used in spinal surgeries that were provided to Medtronic by third-party suppliers and were manufactured in China or Malaysia.
"The overwhelming majority of Medtronic's products are manufactured in the United States or its trading partners, such as Mexico or Ireland."
Seperately, Medtronic also recently acquired Netherlands-based diabetes clinic and research center Diabeter. The center is dedicated to "providing comprehensive and individualized care for children and young adults with diabetes" and has over 1,500 patients.
Terms of the acquisition were not disclosed.