St. Jude Medical Caught Again: Pays $3.65 Million to Resolve Fraud Allegations

St. Jude Medical, Inc., a leading medical device manufacturer, has become ensnared once again in Medicare fraud allegations: this time settling claims that it inflated the cost of pacemakers and defibrillators purchased by government programs. The Department of Justice has alleged that the company overcharged the Department of Veterans Affairs hospitals and Department of Defense military treatment facilities as it did not provide the warrant discounts it was supposed to receive. The recovery cost St. Jude $3.65 million.

In January 2011 the Department of Justice announced a settlement with St. Jude Medical, Inc., as it agreed to pay $16 million to resolve our client’s allegations that it paid kickbacks to physicians to prescribe its products. The complaint, filed by Nolan & Auerbach, P.A. on behalf of our client, alleged that St. Jude Medical paid doctors supposedly to collect data in connection with post-market clinical studies of the company’s products; however, these payments were simply a camouflage for kickbacks; designed and used to increase sales of its devices over competitors, not as bona fide scientific research. Our complaint also alleged that St. Jude Medical shelled out payments to doctors for entertainment, tickets to sporting events, and other gifts and benefits. These alleged practices caused government health care programs to pay millions of dollars in kickbacks to induce physicians to implant St. Jude’s pacemakers and defibrillators which were tainted by illegal kickbacks.

As a result of both settlements, St. Jude Medical, Inc. must implement a strict corporate compliance program. The ramifications of the use of kickbacks are quite serious, particularly in the case of pacemakers and defibrillators.

More information for whistleblowers is located at the Nolan & Auerbach, P.A. website.