DOJ Looking into Alleged Pacemaker Kickbacks (Again)

A third probe into St. Jude Medical (SJM)'s pacemaker business has been disclosed by the company in its most recent quarterly 10-Q filing with the Securities and Exchange Commission.

In the SEC filing, the company reports that in April it received a Civil Investigative Demand (CID) from the Civil Division of the Department of Justice (DOJ).This CID states that DOJ is investigating the company "for potential False Claims Act violations relating to allegations that certain health care facilities and a physician group may have submitted false claims to federal health care programs as a result of alleged inducements paid by the Company to implant the Company's cardiac devices."

Hmm, another kickback scheme investigation.

This all sounds very similar to the January 2011 settlement in which SJM agreed to pay the United States $16 million "to resolve allegations that the company used post-market studies and a registry to pay kickbacks to induce physicians to implant the company's pacemakers and defibrillators," according to a DOJ release at the time. That action was also initiated under the False Claims Act.

The latest action also echoes, and may be related to, the September, 2012 subpoena issued by HHS's Office of Inspector General (OIG) that required SJM "to produce certain documents related to payments made by the Company to healthcare professionals practicing in California, Florida, and Arizona, as well as policies and procedures related to payments made by the Company to non-employee healthcare professionals," as related in the latest 10-Q filing. SJM says that it has provided its response to OIG in the 2012 inquiry and is cooperating with DOJ in the current probe.

But SJM is not the only maker of implantable cardioverter defibrillators (ICDs) to be placed under governmental scrutiny. A report from Reuters says that Boston Scientific has received a subpoena from the HHS OIG related to the performance of some of its ICDs.

According to Reuters, the subpoena received by Boston Scientific on May 8 "requested information related to the 2008 launch of two brands of implanted cardioverter defibrillators made by Boston Scientific."

Stephen Levy is a contributor to Qmed and MPMN.