BOSTON (Reuters) - Abiomed Inc has agreed to pay $3.1 million to resolve a U.S. probe into allegations that it sought to get doctors to use a line of heart pumps it produced by buying them lavish meals at some of the most expensive restaurants in the United States.
The civil settlement was announced on Thursday by U.S. Attorney Andrew Lelling in Massachusetts and resolves allegations first raised in a whistleblower lawsuit filed by a former Abiomed employee.
The government alleged that Danvers, Massachusetts-based Abiomed from 2012 to 2015 sought to get physicians to use its Impella line of heart pumps by paying for their meals at expensive restaurants, according to the settlement agreement.
The restaurants included Eleven Madison Park in New York, Nobu in Los Angeles, Spago in Beverly Hills, California, and Menton in Boston, Lelling’s office said.
Abiomed in a filing with the U.S. Securities and Exchange Commission said it did not admit liability in settling.
Abiomed paid for alcohol at times in amounts inconsistent with legitimate scientific discussion and covered meals the physicians’ spouses attended, the government alleged.
Numerous meals cost more than Abiomed’s own $150 per person guideline and in one instance cost over $450 per person, the settlement agreement said. In some instances the number of people at a dinner was misrepresented and in other cases attendees were listed with generic names, such as “Mike Anesthesia,” the agreement said.
The government contended the meals led to the submission of false claims for payment for Impella heart pumps that cost more than $20,000 each by Medicare, the federal health care program for the elderly and disabled.
“We expect today’s settlement with Abiomed to serve as a warning to medical device manufacturers who try to improperly influence the treatment decisions of physicians,” Lelling said in a statement.
Abiomed in its SEC filing said the probe revealed that less than 2 percent of the meals it paid for exceeded its internal guidelines.
The deal stemmed from a lawsuit filed by a former Abiomed employee, Max Bennett, under the False Claims Act, which allows whistleblowers to sue companies on the government’s behalf to recover taxpayer money paid out based on fraudulent claims.
If successful, whistleblowers receive a percentage of the recovery. The settlement agreement said Bennett will receive $542,500. Abiomed said it will also pay $150,000 to Bennett to cover his attorneys’ fees and costs.
Rory Delaney, a lawyer for Bennett, said he was pleased by the settlement. The deal does not resolve claims in Bennett’s lawsuit that Abiomed terminated him in 2012 in retaliation for complaining about improper conduct by the company.
The case is U.S. ex rel. Bennett v. Abiomed Inc, U.S. District Court, District of Massachusetts, No. 13-12277.
Reporting by Nate Raymond in Boston; Editing by Susan Thomas and Leslie Adler