Heart Device Manufacturer to Pay $3.8 Million

On Friday, June 4, 2010, the Department of Justice announced that three entities, St. Jude Medical, Inc., a heart device manufacturer; Parma Community General Hospital; and Norton Healthcare will pay the United States $3,898,300 in response to allegations that St. Jude paid illegal kickbacks to two hospitals to secure heart-device business.  The alleged kickbacks included rebates which were “retroactive” and were based on the hospital’s previous purchases of St. Jude heart-device equipment as well as rebates which St. Jude paid for purchases of heart-device equipment sold by its competitors to induce purchases of similar equipment from St. Jude in the future.  Pursuant to the settlement terms, St. Jude will pay $3,725,000; Parma Community General Hospital will pay $40,000 and Norton Healthcare will pay $133,300.

This lawsuit was initiated under the False Claims Act by Jerry Hudson, a whistle blower, whose share of the settlement will be $640,050.  The settlement was the result of an investigation by the Department of Justice’s Civil Division, the U.S. Attorney’s Office for the Northern District of Ohio, the Office of Inspector General at the U.S. Department of Health and Human Services, and the FBI.

More information found at:   http://www.justice.gov/opa/pr/2010/June/10-civ-658.html 


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