Healthcare Industry News:  Smith & Nephew 

Devices Orthopaedic

 News Release - July 31, 2006

Smith & Nephew PLC announces Re Internal Investigation

London, UK--(Healthcare Sales & Marketing Network)--Jul 31, 2006 --Smith & Nephew plc (LSE: SN, NYSE: SNN) ("Smith & Nephew" or "the Company") today released the following statement.

Following receipt of the U.S. Department of Justice's investigative subpoena previously disclosed by the Company on June 30, 2006, Smith & Nephew instituted an internal investigation in order to cooperate fully with the Justice Department. Through this internal investigation it has come to our attention that an independent orthopaedic sales representative under contract to the Company sent an email on October 28, 2005 to competitors. That email appears to have resulted from a hospital's request for proposals from the Company and its competitors regarding their orthopaedic implant products. The email proposed to the Company's competitors that they join in a coordinated response to the hospital's request. That email was in clear contravention of Smith & Nephew's policies and was not authorised by Company management. To the best of the Company's knowledge, the October 28, 2005 email was never acted upon by the Company or any of its competitors in responding to the hospital or any customer and resulted in no anti-competitive agreement. The independent sales representative and the Company no longer have a business relationship.

Smith & Nephew is committed to complying with all laws and regulations and to having the highest standards of ethical business practice. Smith & Nephew continues to cooperate fully with the Department of Justice in this investigation.

The investigation is ongoing and Smith & Nephew can provide no assurance as to the final outcome. Therefore, it would not be appropriate to comment further. The provision of the information above should not be construed as an intention on the Company's part to provide further updates except as legally required.

Source: Smith & Nephew

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