Medtronic CEO Put On the Spot

Put on the spot by a shareholder, Medtronic Inc. CEO William Hawkins defended his company's practice of paying physicians for consulting relationships.

The remarks at Thursday's annual meeting, followed news that medical device maker Medtronic paid Dr. David Polly, head of spine surgery at the University of Minnesota, $1.2 million from 2003 to 2007, the Minneapolis Star-Tribune reports. The payments have drawn the interest of Sen. Charles Grassley, an Iowa Republican who has been a career crusader in sniffing out waste and corruption in government.

"We are in a technique-intensive business," Hawkins said, adding that such arrangements are necessary because docs provide advice on how to improve devices, the Star-Tribune reported.

He added: "Medtronic, as the industry leader, has played a strong, ongoing role in working to create new standards for financial transparency and conflict-of-interest disclosure - and we will continue to do so.''

Still, the issue of doctor payments from drug and device companies is drawing criticism and government scrutiny. And it's an embarrassment for Medtronic, the dominant medical device maker in the U.S.