St. Jude settles kickback suit for $16 million

Company whistleblower will collect $2.64 million.

By JANET MOORE, Star Tribune

Last update: January 20, 2011 - 9:32 PM

St. Jude Medical Inc. said late Thursday that it has reached a $16 million agreement with the U.S. Department of Justice to settle charges that it paid kickbacks to doctors who enrolled patients in post-market studies that were really a way to induce the doctors to use the company's products.
Post-market studies are routinely conducted by medical technology companies to see how products work after they are approved by the Food and Drug Administration. The government focused its investigation on three St. Jude studies, Aware, Assist and Housecall Plus, as well as its Act registry of patients.
Little Canada-based St. Jude allegedly paid participating doctors a fee that ranged up to $2,000 per patient as a way of encouraging use of the company's pacemakers and defibrillators.
"When companies pay kickbacks to health care providers in order to pad their bottom line, it taints the information patients rely onto make informed decisions about their health," said Tony West, assistant attorney general for the Justice Department's Civil Division.
The government's action was spurred by a whistleblower lawsuit filed in U.S. District Court in Massachusetts by Charles Donigian, a former St. Jude technical service specialist from Missouri who was hired in 2004.
When Donigian raised concerns about the legality of the payments, he was fired in 2007, according to court documents. Federal law mandates that whistleblowers like Donigian receive a portion of the settlement for stepping forward -- in this case, $2.64 million.
In a statement, St. Jude denied any wrongdoing and said its post-market studies and registries are "legitimate clinical studies designed to gather important scientific data." The company said it agreed to settle to avoid costly litigation.