U.S. Attorney’s Office Intervenes in St. Jude Suit

The U.S. Attorney’s office plans to intervene in a lawsuit filed in 2006 by a former employee against St. Jude Medical Inc. (NYSE:STJ) that alleges the heart-device maker has used medical studies and sporting games to pay kickbacks to doctors and up use of its products, Dow Jones reported Friday.

St. Jude said it objects to the government’s motion filed on Thursday in the U.S. District Court for the District of Massachusetts and said it will vigorously defend itself.

The motion states that the government, whose U.S. Attorney’s office launched an industry-wide investigation nearly 5 years ago to discover whether companies were making improper payments to doctors, now has “good cause to intervene” in the whistleblower suit.

The investigation came about when Charles Donigian, who worked as a technical service specialist for St. Jude from 2004 to 2007 in the St. Louis area, alleged that the heart-device maker paid kickbacks to doctors and other health-care providers to persuade them to prescribe certain St. Jude products. He said he was aware of specific cases where doctors prescribed St. Jude devices because of the payments.

Kickbacks allegedly came in the form of payments for data collection and services related to studies of St. Jude products, and payments for entertainment, travel and sports event tickets, according to Dow Jones.

The government is allegedly involved because the heart-rhythm devices are often implanted in patients covered by the government’s Medicare program, Dow Jones said.