Boston Scientific Settles Guidant Kickback Charges

Boston Scientific has agreed to pay $22 million to settle kickback charges related to its <"">pacemaker and defibrillator business. The U.S. Department of Justice had opened an investigation in 2005 into allegations that Guidant Corporation, which Boston Scientific acquired in 2006, used medical studies as vehicles to provide kickbacks to physicians for implanting its pacemakers and defibrillators.

Boston Scientific said in a statement that by agreeing to the settlement, it was not admitting wrongdoing.

According to a report in the Pioneer Press, the government alleged Guidant designed four post-market studies in 2003 and 2004 as a means to increase device sales by paying doctors to use the company’s products rather than pacemakers and defibrillators from competitors. Each of the four studies required participating physicians to implant multiple Guidant devices.

According to the government complaint, each physician who participated in the post-market studies was paid a fee of between $1,000 and $1,500. Physicians who were believed to favor competing device makers’ products were targeted by the program, the Justice Department claimed, and the fees were used to convince the doctors to switch some of their business to Guidant.

In addition to the $22 million payment, Boston Scientific has agreed to enter into a Corporate Integrity Agreement (CIA) with the Office of Inspector General for the U.S. Department of Health and Human Services. The CIA requires enhancements to certain compliance procedures related to financial arrangements with health care providers. It is limited to the firm’s cardiac rhythm management business, which became part of Boston Scientific through the Guidant acquisition.

This is second settlement reached by Boston Scientific and the federal government in the past few weeks regarding Guidant. Last month, the device maker agreed to pay $296 million to settle a Justice Department probe into Guidant’s handling of heart devices.

In 2007, Boston Scientific agreed to pay $240 million to settle more than 8,000 lawsuits claiming Guidant hid defects in defibrillators, which are devices that shock the heart back into regular rhythm.

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