St. Jude Medical settles whistleblower suit for $3.65 million

by Ben Vernia | May 31st, 2012

The Department of Justice announced on May 31 that Minnesota-based St. Jude Medical has agreed to settle a whistleblower’s complaint in which the government intervened. According to DOJ’s press release:

St. Jude Medical Inc. has agreed to pay the United States $3.65 million to resolve civil allegations under the False Claims Act that the company inflated the cost of replacement pacemakers and defibrillators purchased by the Departments of Defense and Veterans Affairs, the Justice Department announced today. St. Paul, Minn.-based St. Jude Medical develops, manufactures and distributes cardiovascular and implantable neurostimulation medical devices.

The settlement resolves allegations that St. Jude actively marketed its pacemakers and defibrillators by touting the generous credits available should a device need to be replaced while covered under warranty. At the same time, St. Jude allegedly knew that it failed to grant appropriate credits to the purchasers of devices in a large number of cases where a product was replaced while still under warranty. As a result, the United States contended that St. Jude submitted invoices to Department of Veterans Affairs hospitals and Department of Defense military treatment facilities that overstated the cost for replacement pacemakers or defibrillators.

The government announced that the qui tam relators will receive $730,000 of the settlement (a 20% share).

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