U.S. prosecutors say that St. Jude Medical paid doctors as much as $2,000 per patient to convince them to have the company’s pacemakers and defibrillators implanted, and the company has agreed to pay $16 million to settle the illegal kickback allegations.
The U.S. Department of Justice (DOJ) announced the St. Jude settlement agreement on January 20.
According to the DOJ’s claims, St. Jude used three post-market studies and a medical device registry as cover for payments to doctors to entice them to implant their heart devices in patients. The company solicited physicians to participate in the studies to get them to stop using competitor products and to continue to implant their patients with St. Jude-manufactured devices, including pacemakers and implantable cardioverter defibrillators (ICDs), the DOJ alleged.
In a press release issued the same day the settlement was announced, St. Jude claimed that the post-market studies and registries were legitimate clinical studies used to gather important scientific data. The company said that the settlement is not an admission of guilt and that it agreed to the terms to avoid the cost of lengthy and expensive litigation.
The probe came as the result of a whistleblower lawsuit filed by Charles Donigian, who will receive a $2.64 million share of the settlement.
Under the qui tam provision of the False Claims Act, whistleblowers who report a false claim against the government may be entitled to receive a portion of any money that the government recovers from the offenders. In return, the whistleblower must be the first to bring the case to the government’s attention, and must not publicize the claim until the DOJ decides to prosecute the claim.
The St. Jude whistleblower settlement is the second settlement this month involving an implantable defibrillator medical device manufacturer. Last week, a federal judge accepted a guilty plea and $296 million settlement from Guidant over claims that it tried to cover up problems with defective ICDs. The company also agreed to a three-year probation sentence which will come with increased regulatory scrutiny into its devices and practices.