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St. Jude Medical Pays $3.65 Million to Settle Overcharge Claims

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St. Jude Medical Inc. has settled, for $3.65 million, federal False Claim Act allegations arising from a qui tam case in which the relators alleged that the company inflated the cost of replacement pacemakers and defibrillators purchased by the Departments of Defense and Veterans Affairs, the U.S. Department of Justice announced recently.

According to the press release, St. Jude Medical makes and sells cardiovascular and implantable neurostimulation medical devices. The settlement resolves whistleblower 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.

This settlement resolves allegations initially brought by two whistleblowers in federal court in the District of Massachusetts under the qui tam, or whistleblower, provisions of the False Claims Act. The whistleblower portion of the settlement will be $730,000, or 20 percent. As stated in the press release, “[t]he claims settled by this agreement are allegations only, and there has been no determination of liability.”

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