St. Jude to pay $3.65 mln to settle DOJ probe

[Elsha]

St. Jude Medical Inc. STJ -0.31% has agreed to pay $3.65 million to resolve allegations that the company inflated the cost of pacemakers and defibrillators purchased by the U.S. government.

The company allegedly knew it failed to apply pricing credits for devices purchased by the Departments of Defense and Veterans Affairs that were explanted while covered under a product warranty, according to Carmen M. Ortiz, U.S. Attorney for the District of Massachusetts.

The settlement resolves allegations contained in a whistleblower lawsuit filed in federal court in the District of Massachusetts. The lawsuit alleged that St. Jude sales representatives took steps to prevent the return of failed pacemakers and defibrillators, even though the representatives knew that return of the devices was a condition to obtaining warranty credits. The whistleblowers will receive payments of $730,000 from the settlement amount.