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Olympus pays $646M to settle kickback allegations

Nation's largest endoscope distributor enters into three-year deferred prosecution agreement

The nation's largest distributor of endoscopes has agreed to pay $646 million to settle criminal and civil claims that the company offered various kickbacks to hospitals and doctors that signed deals to purchase medical equipment, according to the Department of Justice (DOJ).

As part of the settlement, Olympus Corp. of the Americas admitted to paying kickbacks to hospitals and doctors that helped broker deals to purchase the company's equipment. Some of the kickbacks outlined by the DOJ included a $5,000 grant provided to a hospital that purchased $750,000 in equipment, as well as a $50,000 research grant that Olympus held in limbo until a hospital signed a deal with the company.

In other instances, Olympus funded a trip to Japan for three doctors who convinced their hospital to switch to Olympus products, and offered another physician $400,000 in free equipment for his private practice after he persuaded a New York hospital to sign a deal with Olympus.

In total, the kickbacks helped generate more than $600 million in sales and more than $230 million in gross profit, according to the DOJ.

As part of the settlement, Olympus entered into a three-year deferred prosecution agreement to avoid conviction provided the company adheres to certain compliance requirements. Olympus also paid more than $22 million for violating the Foreign Corrupt Practices Act in Latin America for making various payments to health officials in Central and South America.

Olympus made worldwide headlines throughout 2015 after one of its gastrointestinal scopes was linked to outbreaks of an antibiotic-resistant infection in hospitals throughout the U.S. Fraud and kickback schemes involving medical equipment have frequently been linked to back braces, wheelchairs and other types of durable medical equipment, but up until now, endoscopes have not been a common element of kickback cases.

To learn more:
- read the DOJ announcement

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