On October 14, 2020, the DOJ announced that it had finalized settlement negotiations with Merit Medical over allegations that Merit provided illegal payments to physicians in order to induce those providers to use Merit products. Under the guise of an internal program known as the “Local Advertising Program,” Merit allegedly provided remuneration to healthcare providers in the form of millions of dollars in free advertising assistance, practice development, practice support, and unrestricted “educational” grants to induce healthcare providers to purchase a wide variety of Merit products.
Despite publicly claiming that its financial assistance was designed to “increase the awareness” of medical treatments, Merit allegedly provided assistance only to select healthcare providers as a reward for past sales, to induce future sales, and to steer business to Merit and away from competitors. As part of the settlement agreement, Merit was required to enter into a 5-year CIA. The CIA requires Merit to hire a compliance expert and an independent review organization (at Merit’s expense) to analyze the company’s compliance systems and transactions.