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Boston Scientific Agrees to Pay $22 Million to Settle Guidant Charges

Dec 29, 2009 | Parker Waichman LLP

For the second time in a month, Boston Scientific has settled federal charges related to Guidant Corporation.  Boston Scientific acquired Guidant in 2005.  

Last month, the Boston Scientific agreed to pay $296 million to settle another Justice Department probe into Guidant’s handling of heart devices.

According to a report in the Pioneer Press, this latest settlement involves allegations that 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 pacemaker and defibrillators.  The U.S. Department of Justice had alleged  each physician who participated in the post-market studies was paid a fee of between $1,000 and $1,500 that was designed to induce the doctors to switch some of their business to Guidant.

Under the agreement, Boston Scientific will pay a $22 million penalty.  The company has also 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.

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

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