St. Jude Medical pays $16M to settle kickback claims

St. Jude Medical Inc. agreed to pay the U.S. $16 million to settle kickback allegations. The medical device company, based in St. Paul, Minn., used post-market studies and a registry as a way to pay participating physicians kickbacks to encourage them to implant the company's pacemakers and defibrillators, according to a Department of Justice press release.

This is the second time in two years that St. Jude has had to settle kickback allegations. Last June, St. Jude agreed to return $3.9 million to the federal government to settle allegations that it paid illegal kickbacks to hospitals to grow its market share for cardiac device sales.

Besides collecting data and information from participating physicians, St. Jude allegedly used studies and the registry as a way to increase device sales by paying certain doctors to choose St. Jude pacemakers and implantable cardioverter defibrillators for their patients. St. Jude paid each participating physician a fee of up to $2,000 per patient.

"When companies pay kickbacks to healthcare providers in order to pad their bottom line, it taints the information patients rely on to make informed choices about their health," Tony West, Assistant Attorney General for the Civil Division, said in a statement. "It is critical that physicians base their decisions on which medical device to implant on the best interest of the patient, not on whether a device manufacturer will pay an extra fee or honoraria for the implant."

"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," Carmen Ortiz, U.S. Attorney for the District of Massachusetts, added.

The person who blew the whistle on this case will get $2.6 million.

The Justice Department's Civil Division, the U.S. Attorney's Office for the District of Massachusetts, the Office of Inspector General at the U.S. Department of Health and Human Services and the FBI investigated this case.

To learn more:
- read the DOJ press release
- here's the Star Tribune story