St. Jude Medical to Pay $16M to Settle Kickback Claims

John Commins, January 24, 2011

St. Jude Medical Inc. will pay $16 million to resolve whistleblower allegations that it illegally used post-market studies and a registry to pay kickbacks to physicians who used the device maker's pacemakers and defibrillators, the Justice Department said Friday.

St. Jude used the studies and registry to increase device sales by paying certain physicians up to $2,000 per patient to select St. Jude pacemakers and implantable cardioverter defibrillators for their patients, or to lure them away from competitors, DOJ said.

"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, which led the investigation.

"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," Ortiz said.

This action was initiated by a whistleblower action under the False Claims Act by Charles Donigian, who will get $2.6 million of the recovery money.

St. Paul, MN-based St. Jude issued a statement on its Web site acknowledging the settlement , but admitted no wrongdoing.

John Commins

John Commins is a senior editor at HealthLeaders Media.

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