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Lawsuits Allege Medtronic, Other Firms Illegally Marketed Surgical Ablation Products

Jul 16, 2009 | Parker Waichman LLP

Medtronic Inc., St. Jude Medical Inc., AtriCure Inc. and Boston Scientific Corp. all allegedly paid kickbacks to doctors in order to convince them to use their surgical ablation products to treat the heart-rhythm defect called atrial fibrillation, according to lawsuits recently unsealed in Texas.   According to The Wall Street Journal, the lawsuits were filed by former employees of the companies.

Allegations of kickbacks by medical device makers are nothing new.  For example, in 2007 a New Jersey based federal probe found  that some orthopedic device makers made lucrative payments to U.S. physicians  between 2002 and 2006 as a way to encourage doctors to favor their products. Stryker Orthopedics cooperated with prosecutors and escaped a fine, but agreed to federal monitoring for 18 months. The other companies, Zimmer Holdings Inc., Depuy Orthopaedics Inc., Biomet Inc. and Smith & Nephew Inc. agreed to a $311 million settlement with the Justice Department and the U.S. Department of Health and Human Services.

The lawsuits detailed by The Wall Street Journal, which were filed in federal court in Houston, are related to an inquiry in Texas by the U.S. Justice Department that was previously disclosed by several of the companies in filings with the Securities and Exchange Commission.  They were originally filed in 2007, the Journal said.

According to the Journal, the lawsuits allege that a "fraudulent marketing and inducement campaign" involving kickbacks to doctors and hospitals resulted in excessive charges to the Medicare insurance program.  For example, several of the suits allege that Boston Scientific, Medtronic and AtriCure marketed surgical ablation equipment as a treatment for atrial fibrillation even though it was not approved by the Food and Drug Administration to treat that condition.

Those charges were made by a former Boston Scientific salesperson, who the Journal says, claimed to have been fired after complaining about the company's allegedly illegal practices.

All of the companies involved in the lawsuits told The Wall Street Journal that they were cooperating with the probe.  Boston Scientific is no longer in the ablation business, the Journal said.


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