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January 20, 2011

BOSTON, Mass. - United States Attorney Carmen M. Ortiz announced today
the Government has a reached a $16 million civil settlement with St. Jude Medical, Inc. (“St. Jude”), of St. Paul, Minnesota, to resolve allegations that it used post-market studies and a registry to pay kickbacks to induce physicians to implant St. Jude pacemakers and defibrillators.

Post-market studies are intended to assess the clinical performance of a medical device or drug after that device or drug has been approved by the Food and Drug Administration. Registries are collections of data maintained by a device manufacturer concerning its products that have been sold and implanted in patients.

The United States contends that St. Jude used three post-market studies and a device registry as vehicles to pay participating physicians kickbacks to induce them to implant St. Jude pacemakers and defibrillators. Although St. Jude collected data and information from participating physicians, it knowingly and intentionally used the studies and registry as a means of increasing its device sales by paying certain physicians to select St. Jude pacemakers and ICDs for their patients. In each case, St. Jude paid each participating physician a fee that ranged up to $2,000 per patient. The United States alleges that St. Jude solicited physicians for the studies in order to retain their business and/or convert their business from a competitor’s product.

“Medical device and pharmaceutical companies can use post-market studies legitimately to obtain information about how their products work in the field, but they cannot use those studies, and the honoraria associated with them, to induce physicians to select their products. 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,” said U.S. Attorney Ortiz.

“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 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.”

This matter was investigated by the Office of Inspector General of the Department of Health and Human Services and the Federal Bureau of Investigation. It was handled by Donald Savery and Gregg Shapiro in Ortiz’s Civil Division and Tom Morris in the Civil Division of the Department of Justice.


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