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Medtronic issues clarification following AP report

Medtronic has issued a clarification to comments made by its CEO, following an Associated Press report today that apparently contradicted the executive's remarks about a former Medtronic consultant now accused of falsifying study results.

A study by Dr. Timothy Kuklo at Walter Reed Army Medical Center found unusually high success rates using a Medtronic bone-growth product to treat wounded soldiers' shattered legs. The hospital's commander later told the New York Times that it has no evidence that the patients ever existed.

Medtronic has downplayed its relationship with Dr. Kuklo but never fully disclosed how much he was paid or when the payments began. Asked on Monday about the company's relationship with Dr. Kuklo, Medtronic CEO Bill Hawkins told CNBC that, "Our relationship began after he left the Walter Reed Medical Center and went to Wash U."

An Associated Press article today about Pentagon employees receiving free travel and lodging from companies and trade groups mentioned Medtronic as one of the big spenders: "Medtronic, a multibillion-dollar medical technology company, spent $93,000 on 86 trips. Fifteen of those, totaling more than $13,000, were taken between 2001 and 2006 by Dr. Timothy R. Kuklo, a surgeon who became a Medtronic consultant after retiring from the military in 2007."

The apparent contradiction prompted Medtronic to issue this clarification to CNBC on Hawkins' statement:

"Bill (Hawkins) indicated that our relationship began with Dr. Kuklo when he joined Washington University. The correct answer is that while we began a consulting relationship with Dr. Kuklo in August 2006, Dr. Kuklo did perform a number of reimbursable functions, including training and education, for the company while he was a practicing physician at Walter Reed prior to that time."

Sen. Chuck Grassley, R-Iowa, is investigating the financial ties between Kuklo and Medtronic, and in the CNBC interview Hawkins also said that the company is in discussions with the senator's office and may begin disclosing information this week.

As previously reported, Medtronic in 2010 will begin voluntarily disclosing all payments to doctors who receive more than $5,000 per year from the company.

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