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Olympus Agrees to Pay $646 Million Fine for Kickback Violations In US and Latin America

 

Endoscopes distributor Olympus Corp of the Americas has agreed to pay a $623.2 million fine to settle criminal charges and civil claims related to the company’s illegal payment of kickbacks to doctors and hospitals. The settlement is the largest amount in United States history involving violations of the Anti-Kickback Statute by a medical device company. The company’s Latin American division will also pay $22.8 million to resolve criminal charges in Latin America.
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The 5 Most Overpaid Medtech CEOs

Public interest in ballooning CEO pay spiked recently, after the billionaire Republican presidential candidate Donald Trump called it “disgraceful” and “a total and complete joke.” Speaking to his populist base, he stressed the need for reinvigorating U.S. manufacturing but essentially argued that CEOs are already overpaid: “I know companies very well and the CEO puts in all his friends…and they get whatever they want you know because their friends love sitting on the board.”

Here at Qmed, we delved into corporate SEC filings to figure out which CEOs arguably get paid more than they should, comparing their pay to their company’s financial performance.

We ranked overall compensation for CEOs at 18 of the largest medical device companies publicly traded in the U.S. We then compared the compensation rank with a company performance ranking based on four factors: revenue growth, five-year stock performance compared to the S&P 500, earnings growth, and total revenue (as a control for size).

Here are the five CEOs whose compensation ranking was much larger than the company performance ranking .

1. Stephen MacMillan, Hologic

Compensation Rank: 4

Company Performance Rank: 18

Hologic provided MacMillan with generous awards to recruit him in December 2013, during the first quarter of Hologic’s fiscal year ended September 27, 2014. Much of the $24.5 million compensation the former Stryker CEO received came from $15.3 million in stock awards under MacMillan’s employment agreement.

It was slow going, however, under MacMillan’s initial leadership of the Bedford, MA–based diagnostic and medical imaging equipment maker. Revenue only grew 1.5% during the 2014 fiscal year, 14th among the 18 companies analyzed, and earnings of $17.3 million were less than 1% of revenue from the previous year—though it did mark a turnaround from the nearly $1.2 billion that Hologic lost during the 2013 fiscal year.

MacMillan, however, appears to be more than earning his keep this year. Hologic had the best performing stock among large medical device companies during the first nine months of 2015. Its stock value was up more than 45% during the time period. Hologic says it has been seeing accelerated adoption of its FDA-approved Genius 3D mammography systems. 3-D imaging is able to detect 41% more invasive cancers than standard 2-D imaging, according to Hologic.

2. Michael Mahoney, Boston Scientific

Compensation Rank: 11

Company Performance Rank: 16

While Michael Mahoney has helped turn around the performance of Boston Scientific, it comes as a cost. Mahoney is one of the best paid CEOs in the medical device industry. In 2014, he made $10,527,884—only slightly less than the tenth-highest paid medtech CEO Timothy Ring of C.R. Bard, who made $10,840,935.

Mahoney’s annual compensation has hovered in the $10–$12 million range since he took over the Boston Sci’s CEO post in late 2012.

In 2012, the Minneapolis/St. Paul Business Journal explained that Mahoney brought in nearly $12 million after working only 76 days after replacing retiring the then CEO Hank Kucheman. Most of the money from then until now comes from stock options.

For the company’s most recent fiscal year, he received total compensation of more than $10.5 million. Meanwhile, the company saw revenue grow 3.3% the same year, placing the company in the middle of the pack.

A person investing $100 in Boston Scientific stock at the end of 2009 would have had $147.22-worth of stock five years later—$57.92 less than if they had simply invested it in the S&P 500. It was one of the worst rankings for stock performance.

However, Boston Scientific stock has been showing improvement this year, up more than 26% in value for the first nine months of 2015. In fact, a report from Evaluate Medtech found that the company’s share price rose 34% in the first six months of the year—the biggest increase of any medtech company with $15 billion or more in revenue. Boston Scientific’s interventional cardiology business has played an important role helping to drive the company forward.

3. Miles White, Abbott Labs

Compensation Rank: 6

Company Performance Rank: 11

White’s $17.3 million in total compensation was actually down a bit during the fiscal year ended December 31, 2014; he received $20.9 million the year before. White’s option awards were valued at $4.6 million, a little more than half what he received the year before.

Company performance, however, does not seem to have kept up. Revenue was up only 3% during the year, and profits were down 11%. Abbott Labs comes in 11th for five-year stock performance compared to the S&P 500; it’s stock price was only slightly up during the first nine months of 2015.

4. Jeffrey Immelt, GE

Compensation Rank: 2

Company Performance Rank: 6

It makes sense that Immelt’s $37.3 million annual compensation would place him near the top of the list, especially since the industrial conglomerate General Electric is one of the largest companies in the world with $148.6 billion in annual revenues. Only $18.3 billion of that revenue came from GE Healthcare, but the amount still makes GE one of the largest medical device companies in the world.

Qmed controlled for revenue size in its company performance rankings, and yet GE still came in sixth. It was 13th for revenue growth and 13th for earnings growth, measured as a percentage of the previous year’s revenue.

GE Healthcare revenue in 2014 was only up 1%, to $18.3 billion, amid slow growth in developed markets outside the U.S.

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Siemens Pays $5.9M to Settle Overcharging Claim

Siemens pays $5.9 million to settle claims it overcharged U.S. government for imaging equipment

May 15, 2015
by Lauren Dubinsky , Staff Writer
Siemens Medical Solutions USA, Inc. has agreed to pay a $5.9 million settlement to resolve allegations that it overcharged the U.S. government for medical imaging equipment.Between February 2002 and December 2008, the U.S. Department of Defense (DoD) and the Defense Supply Center of Philadelphia (DSCP) entered into an agreement with Siemens called the DSCP Contract. Through that contract, those organizations — as well as the U.S. Department of Veteran Affairs (VA) — purchased medical imaging equipment and support products.

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The government is claiming that Siemens did not provide the DoD with the largest discount for certain purchases under the contract. Instead, it alleges that Siemens gave the biggest discount to a private or commercial customer that purchased a similar product.

The government also states that Siemens withheld information about overcharging. According to a statement from the DoD, when the overcharging was initially revealed, Siemens “issued mass discounts on multiple occasions to address the mis-billing on a prospective basis,” but that only further concealed it from the government.

The VA was also overcharged for certain orders made under the contract that had been converted to a newer model, according to the government’s claim. Some of the orders did not receive the larger discount that pertained to the newer model.

Despite paying the settlement, Siemens “denies any wrongdoing,” says Lance Longwell, director of corporate communications at Siemens. He told DOTmed News in a statement that the company made the payment to prevent further expenses and distractions.

Longwell also stated that Siemens has improved its processes for monitoring government compliance over the years and continues in its unwavering commitment to its customers, “including important government customers, and adherence to all applicable laws and regulations.”

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2015 MacBook is the least repairable yet

Apple By Matthew Humphries Apr. 15, 2015 11:28 am

Apple has demonstrated repeatedly that it does not want owners of its hardware attempting to fix it themselves. That’s their right, but the 12-inch 2015 MacBook has taken that unrepairablity outside of Apple’s own tech department to a new level.

iFixit has carried out its usual teardown of the newest MacBook on the market, and the verdict is basically: don’t even bother trying to repair this laptop yourself. It scored 1 out of 10 on their scale, and is a case filled with proprietary screws and a lot of adhesive.

 

We’ve already seen how the MacBook is mostly batteries inside the case, but the terraced battery system isn’t just placed snugly, it is firmly glued to the lower casing. The central battery is even placed in a well and glued in place making it very difficult to remove if necessary. The result is batteries that have to be forced out and are left covered in glue.

Then we have the new butterfly mechanism keyboard. It has a backing secured with adhesive that once removed reveals two proprietary pentalobe screws per key. That’s 83 screws total just in the keyboard. iFixit also has some concerns about that butterfly mechanism as it is very thin and uses a plastic hinge. How well will that hold up over time?

Apple has been criticized for only including a single USB port to handle both power and peripheral connections. It is going to get a lot of use and abuse, but that doesn’t mean it’s easy to replace if damaged. Apple has secured it underneath the display bracket, meaning a lot of disassembly will be required if it breaks.

 

Then finally, and as expected, the logic board has everything soldered on to it, so no RAM or flash memory upgrades, and if something goes wrong you’ll need a new board.

If you’re purchasing this MacBook and happen to be accident prone or really couldn’t handle a costly repair in the near future, then you need to do what Apple really want you to do anyway: also purchase an AppleCare Protection Plan.

CLICK HERE to read the complete story and see the photos

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Beware Mukaz Hassan from Almukaz Company LLC

reposted from DotMed Forums . . .

Adam Rudinger

Beware Mukaz Hassan from almukaz company llc

September 25, 2014 10:22

I received an email from this guy wanting to buy 2 scopes from me recently. I went online and checked him and his company out and it seemed legit. He requested a wire transfer as payment, which I have done for many other companies around the world, so I gave him my info. He then proceeded to “mistakenly” deposit $29,500 into my account and wanted me to return the difference to him as it was an “error” in his accounting department. I called my Bank to report this as obvious fraud and sure enough they had a letter in hand that stated the money was being deposited from a well known Bank. The lady at the Bank laughed and said it looked like a 3rd grader wrote the letter and yes it was obviously fraud. Can’t these people get a real job and earn a real living instead of trying to rip people off!!!!

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Scooter Childs

reposted from DotMed Forums . . . .

Mohamed Yahya Ibrahim

BE AWARE FOR DEAL WITH RALPH CHILDS (SCOOTER)

November 16, 2014 11:15

BE AWARE FOR DEAL WITH RALPH CHILDS (SCOOTER)
FROM COMPANY : PROSCAN MIDDLE EAST
in Dubai
i made deal with him for CT scanner and after 3 months no equipment arrive and after more dialog he sent half of the funds from 3 month ago
and not back the balance until now
so advise any one to not deal with him
thanks

Chand Jain

re: BE AWARE FOR DEAL WITH RALPH CHILDS (SCOOTER)

November 17, 2014 11:04

He cheats everyone like this and keeps people’s hard earned money and still shows that he is an honest man.
He says that he will return the balance money which will never happen since it is not in his nature to return the money.

Chris Salberg

re: BE AWARE FOR DEAL WITH RALPH CHILDS (SCOOTER)

November 18, 2014 06:21

Everyone in the U.S. know about this fool……that’s why he does business elsewhere……last I heard he was actually looking for a job as a service engineer. He’s sociopath…….always blames others for his scams……he was on linkedin and some of his posts are absolutely comical (except to the one’s he’s scammed) He got nailed by over 30 people he scammed on one of his posts. I believe he’s been blacklisted here on DotMed but you can still type in his name and look at all the complaints about him and all his lies and excuses. What a pile of S**T this loser is!

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Mid-Year Service Contract Report:

Consumers will pay nearly $40 billion this year for product protection plans, despite the best efforts of the watchdogs who tell them not to. It’s mostly for smartphones and passenger cars, though, because everything else is perceived to be disposable and not worth fixing.

The service contract industry is huge and growing in the U.S., despite the best efforts of critics who, right around this time of year, repeat their outdated “don’t buy extended warranties” message to consumers.

Even our incomplete accounting of the various consumer-facing segments of the service contract industry suggests a market worth almost $40 billion this year, assuming that no polar vortex arrives before Santa. We’ve counted up the total premiums paid by consumers in the vehicle service contract segment, the home warranty segment, the retail brown and white goods segments, and the mobile phone insurance segment, and the total market estimate we come up with for this year is $39.5 billion to be paid by U.S. consumers for what we’ll call product protection plans.

And that’s not counting the jewelry, furniture, and sports equipment sectors, which we’ll get around to sizing in 2015, we hope. And that’s also not counting the purely business-to-business service contract sector, which covers everything from truck fleets to jet engines, not to mention printers, copiers and coffee machines. And that’s only the U.S. Then there’s the European market, and some Asian, African and South American markets that are just getting it together. They need to be counted too.

Bad Marks on Report Card?

Despite the best efforts of Consumer Reports and its allies, more protection plans are being sold now than ever before. If we were to give out ratings like they do, we’d have to give them a little black circle on their report card. For while they might take credit for some of the extended warranty industry downturn from 2006 to 2009, it just as easily could have been caused by the then-brewing recession, the commoditization of major home electronics and home computer product lines, or the shift to online shopping, where it’s quite easy to say no to a click box offering you a protection plan.

Since 2009, we don’t think there’s been a down year for the market. Then again, unlike with our product warranty expense data, with service contracts we’re making estimates based on confidential assistance from industry experts and occasional confirmations from the financial statements of some of the publicly-held players.

Readers are urged to take a look at the data in Figure 1 and compare it to your own internal estimates. Behind this data stands an array of charts and tables dissecting these various markets by underwriter, administrator, and seller. We won’t include all that information here, but rest assured that the $39.5 billion total is built from the bottom up.

 

To read this article and a whole lots more, subscribe to this free newsletter at Warranty Week.  Click here.

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