A Medical Device Daily

Three orthopedics companies – Zimmer, Biomet and DePuy (all Warsaw, Indiana) – have received a new round of subpoenas from the U.S. Department of Justice (DoJ), seeking information from the companies, apparently probing antitrust issues.

This is the second round of subpoenas that the large orthopedic manufacturers have been hit with. In March 2005, these three companies, plus Stryker (Kalamazoo, Michigan) and Smith & Nephew (London), received DoJ subpoenas requesting information concerning the relationship between the manufacturers and their physician clients. None of the companies indicated whether the new subpoenas relate to this investigation or offer a new line of enquiry.

Zimmer Holdings reported late Friday that it had received a subpoena from the Antitrust Division of the Department of Justice, requesting documents for the period beginning January 2001 through the present, pertaining, it said, “to an investigation of possible violations of federal criminal law involving the manufacture and sale of orthopedic implant devices.” It said it was cooperating with the request

This was followed by similar announcements on Monday by Biomet and DePuy, a business of Johnson & Johnson (New Brunswick, New Jersey), that they had received similar subpoena requests. DePuy said it has had search warrants executed in connection with the investigation and that it is cooperating with the request.

In the wake of the companies' reports, shares fell across the orthopedics sector – even shares of companies that said they haven't received a subpoena – the apparent result of investor concerns about the possible fallout of the investigations, such as potential fines and lower product prices.

In other legalities, Vascular Solutions (Minneapolis) and Diomed, a subsidiary of Diomed Holdings (Andover, Massachusetts) reported that they have settled the trademark and trade secret litigation between them and all issues surrounding Diomed's marked sheath patents.

The companies said that the terms of the settlement are confidential.

They said that the settlement does not affect the ongoing dispute between the parties regarding alleged infringement of Diomed's U.S. patent No. 6,398,777.

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