August 6, 2010 / 10:03 PM / 9 years ago

U.S. seeks role in latest St Jude whistleblower case

NEW YORK (Reuters) - The United States is seeking to intervene in a lawsuit by a former St Jude Medical Inc worker who accused the maker of pacemakers and other heart devices of involvement in a kickback scheme.

The move came nearly five years after news surfaced in October 2005 that federal investigators opened a probe into alleged kickbacks relating to St. Jude and Medtronic Inc, another large maker of implantable devices.

While the United States declined in December 2009 to intervene in the case, it said it has since interviewed more witnesses and reviewed more documents, and now has “good cause to intervene,” U.S. Attorney Carmen Ortiz wrote in a Thursday filing with the federal court in Boston.

The case was brought by Charles Donigian, who said he worked as a technical service specialist for the company in the St. Louis area from the fall of 2004 to the spring of 2007.

St. Jude spokeswoman Amy Jo Meyer said in a statement the St. Paul, Minnesota company objects to the government motion and will “vigorously defend” against the lawsuit.

St. Jude in June agreed to pay the federal government $3.7 million to settle a separate whistleblower suit filed by Jerry Hudson, a former St. Jude sales manager. That suit alleged the company paid kickbacks to hospitals in Kentucky and Ohio to induce them to buy its heart devices.

Whistleblower cases, sometimes known as qui tam cases, are a means for people who believe companies has defrauded the government to file suit. These people can share in settlement or other payments that companies may make.

According to an amended complaint filed in January, Donigian believes St. Jude paid kickbacks to doctors, hospitals and other healthcare providers to induce them to prescribe its products and the providers then submitted reimbursement claims to Medicare and other federal programs.

In addition, the complaint alleged St. Jude “repeatedly” violated a U.S. anti-kickback law by paying professionals “sham fees” for fake clinical research studies, and by providing them and sometimes their spouses with “entertainment, gifts, travel, vacations, temporary staff, tickets to sporting events, ‘educational’ events at luxury results and other illegal inducements.”

St. Jude urged the court in June to dismiss the complaint. It called Donigian “a disgruntled former employee” who alleged “nothing more than what was in the public domain.”

The company also said Donigian failed to allege it “caused any healthcare provider to submit a materially false claim to the government for reimbursement.”

A spokeswoman for the U.S. Attorney’s Office in Boston said she could not comment further.

The case is U.S. ex rel. Charles Donigian vs. St Jude Medical Inc, U.S. District Court, District of Massachusetts, No. 06-11166.

Reporting by Jonathan Stempel and Ransdell Pierson in New York; editing by Andre Grenon

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