St. Jude Medical pays $16M to settle kickbacks case

Little Canada-based St. Jude Medical has agreed to pay $16 million to the U.S. Department of Justice to settle claims the company paid kickbacks to physicians.

The settlement stems from a DOJ investigation into improper inducements provided to doctors by companies. The investigation began in 2005, and the government eventually accused St. Jude of paying doctors to help with studies of its pacemakers and other devices or to provide information for a registry tracking devices in use.

The government says St. Jude did collect data and information from participating physicians. But the government alleged St. Jude also used the studies and registry to increase sales by paying physicians up to $2,000 if they used a St. Jude device for a patient.

St. Jude admitted no wrongdoing and says it settled the matter to avoid the potential costs and risks associated with litigation.

The DOJ still maintains St. Jude was giving doctors kickbacks.

"When companies pay kickbacks to health care providers in order to pad their bottom line, it taints the information patients rely on to make informed choices about their health," said Tony West, Assistant Attorney General for the DOJ's Civil Division. "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."

The action against St. Jude was prompted by a whistleblower. He will receive about $2.5 million.

The settlement was the result of an investigation by 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.