Wright Medical CEO Resigns, CTO Gets Fired-The Knee and Hip Device Business
Posted Apr 05 2011 6:25pm
Well it looks like J and J is not alone with problems in this area and Wright had issues with the Department of Justice on marketing practices. Was the pressure there to “drive” those numbers? You would be surprises what internal pressure at companies does, have been there after 20 years in sales with Fortune 500 companies.
Right now with marketing efforts on steroids through out the US, we may see more of this as we know there are more investigations ongoing. Perhaps we will hear more and when I was in sales, when a company wanted to fire someone and there was no reason they would entice employees to fudge a little on something on their expense account and a $5 error was all it would take for a parking fee that was never paid for one example. Saw a lot of that. This case sounds a bit different with the CTO getting fired so this leads me to think that perhaps we had some technology issues along the line and that could be anything from inflated numbers to mistakes to software that didn’t work right. BD
* Chairman David Stevens named interim CEO
* Wright says changes unrelated to financial performance
* Shares fall nearly 13 percent (Recasts with shares, adds analyst comments, background, byline)
By Susan Kelly
CHICAGO, April 5 (Reuters) - Wright Medical Group Inc ( WMGI.O ) said Chief Executive Gary Henley resigned before a board meeting to discuss the company's compliance program, and it fired its chief technology officer, sending its shares down almost 13 percent.
The orthopedic device maker named Chairman David Stevens as interim CEO to replace Henley, who resigned on Monday after five years at the helm.
The DOJ complaint, alleging Wright used consulting deals to induce surgeons to buy its hip and knee products, can be dismissed if Wright meets requirements of the deferred prosecution agreement.
Wright also agreed to pay $8 million in a civil suit to settle the government's contention that its fraudulent marketing practices caused false claims to be submitted to the Medicare health insurance program for the elderly and disabled.
Matson said the company's compliance issues have the potential to hurt revenue growth. "Compliance can start to become bureaucratic. It can add to costs. It can slow down the operations of the company and add expense," he said.