Minnesota medtech giant St. Jude Medical (NYSE:STJ) revealed a new Justice Dept. inquiry today, noting in its recent quarterly report that federal officials launched a probe into the company’s cardiac implant sales.
St. Jude last month received a Civil Investigative Demand from the Civil Division of the DoJ, stating that the department was looking into allegations that the company may have paid illegal kickbacks to encourage physicians to buy St. Jude’s cardiac devices. The company provided few other details, but said that it’s working with the DoJ to respond to the inquiry.
St. Jude said that federal regulators are looking into "potential False Claims Act violations relating to allegations that certain health care facilities and a physician group may have submitted false claims to federal healthcare programs as a result of alleged inducements paid by the Company to implant the Company’s cardiac devices."
St. Jude spokespeople did not immediately respond to requests for comment.
It’s not the 1st time that St. Jude has landed on the DOJ’s radar. The company in 2010 came under fire for allegations that it used medical studies to pay kickbacks to doctors. That case stemmed from a 2006 whistleblower lawsuit filed by former employee Charles Donigian, who accused the company of offering travel and tickets to sporting events to influence doctors, hospitals and other healthcare providers to use certain St. Jude products.
That lawsuit also alleged that St. Jude used the clinical trials to set up a structure to pay doctors for implanting its devices. The lawsuit claimed STJ paid $700 per implantation of its Identity pacemakers and $100 per follow-up visit In the Aware trial, for example.
In June 2010 St. Jude and a pair of hospitals in the Midwest agreed to pony up $4 million to settle a federal lawsuit accusing the device maker of providing illegal rebates to the healthcare providers.
