St. Jude settles kickback suit with DoJ for $16M

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St. Jude Medical has agreed to pay $16 million to the U.S. to resolve allegations that the company used post-market studies and a registry to pay kickbacks to induce physicians to implant its pacemakers and defibrillators, the Department of Justice announced.

The DoJ contended that St. Jude used three post-market studies and a device registry as vehicles to pay participating physicians kickbacks to induce them to implant St. Jude pacemakers and implantable cardioverter-defibrillators (ICDs). Although St. Jude collected data and information from participating physicians, it is alleged that the company knowingly and intentionally used the studies and registry as a means of increasing its device sales by paying certain physicians to select St. Jude pacemakers and ICDs for their patients.

In each case, St. Jude paid each participating physician a fee that ranged up to $2,000 per patient, DoJ said. The U.S. alleged that St. Jude solicited physicians for the studies to retain their business and/or convert their business from a competitor’s product.

“We are pleased to have reached a settlement agreement with the DoJ that fully resolves the post-market study matter in Boston,” responded the St. Paul, Minn.-based St. Jude. “The company maintains that its post-market studies and registries are legitimate clinical studies designed to gather important scientific data and St. Jude Medical does not admit liability or wrongdoing by entering into this agreement. The company entered into a settlement agreement to avoid the potential costs and risks associated with litigation. This settlement brings the previously reported post-market study investigation to a close.”

“Medical device and pharmaceutical companies can use post-market studies legitimately to obtain information about how their products work in the field, but they cannot use those studies, and the honoraria associated with them, to induce physicians to select their products,” said Carmen Ortiz, U.S. Attorney for the District of Massachusetts. “Cardiologists and electrophysiologists should make their decisions on which pacemaker or defibrillator to implant in a patient based on their independent medical judgment, not based on how much the manufacturer is paying them to implant the device.”

This action was initiated by the filing of a qui tam action under the False Claims Act (FCA) by a relator, Charles Donigian. The FCA permits a whistleblower to recover a share of the government recovery, and in this case Donigian will recover $2.64 million.