By David Ingram
WASHINGTON Oct 17 Boston Scientific Corp
agreed to pay $30 million to settle allegations that the
Guidant unit it acquired in 2006 knowingly sold defective heart
devices implanted in Medicare patients, the U.S. Justice
Department said on Thursday.
Guidant from 2002 to 2005 sold the implantable
defibrillators even though it knew they could short-circuit and
become ineffective at correcting heartbeat rhythms, the
department said in a statement.
In 2010, similar allegations led Boston Scientific to plead
guilty to two misdemeanor charges of withholding information
from the U.S. Food and Drug Administration (FDA) and agree to
pay $296 million in fines.
The latest settlement resolves a civil lawsuit the Justice
Department brought in 2011 under a law designed to recover money
defrauded from government programs such as Medicare.
Boston Scientific spokesman Peter Lucht said: "While the
company continues to deny the allegations made in the complaint,
it felt it was in the best interests of all parties to settle
this matter and avoid further protracted litigation."
Boston Scientific bought Guidant for $27 billion in 2006.
Guidant did not fully disclose to doctors and the FDA the
problems with its heart devices until May 2005 after it was
contacted by a New York Times reporter, according to the
James Allen, a patient who received one of the devices and
who initially brought the civil suit under the anti-fraud False
Claims Act, will receive $2.25 million as a whistleblower, the