Medical-Device Suits Allege Kickbacks

-The Wall Street Journal

07/16/2009 - Former employees of certain medical-device makers allege in lawsuits unsealed in a Texas federal court that the companies paid kickbacks to heart surgeons to get the doctors to use their products to treat the heart-rhythm defect called atrial fibrillation.

The lawsuits, filed in federal district court in Houston, name at least four companies whose products are among those used in surgery to treat the heart condition. They are AtriCure Inc., Medtronic Inc., St. Jude Medical Inc. and Boston Scientific Corp.

An unnamed former Boston Scientific saleswoman is the plaintiff in several of the cases. One plaintiff named in the Medtronic lawsuit is Donald P. Boone, a former sales manager for various device makers, including St. Jude and Guidant Corp., which is now part of Boston Scientific. He couldn't be reached for comment.

The allegations 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.

Medtronic, St. Jude and Boston Scientific say they are cooperating with federal authorities. Boston Scientific says it sold the units that make the devices as of 2006 and 2007, and is no longer in the ablation business. All four companies declined to comment further.

Atrial fibrillation, an irregular, quivering heartbeat in which blood pools inside the heart, can eventually lead to strokes. It may involve no symptoms or symptoms that include palpitations, fainting and weakness. The products at issue are used in surgical "ablation." In this operation, cardiac surgeons use radiofrequency-emitting and other devices to destroy small sections of the heart muscle and correct the faulty heartbeats.

The suits, originally filed in 2007 but recently unsealed by a Texas federal judge, allege that a "fraudulent marketing and inducement campaign" involving kickbacks to doctors and hospitals resulted in excessive charges to the Medicare insurance program.

The case against Boston Scientific was filed by a former saleswoman who says she was fired after complaining about illegal practices at the company.

The saleswoman, who is not identified, also alleges in cases against Boston Scientific, Medtronic and AtriCure that these companies marketed surgical ablation equipment as a treatment for atrial fibrillation even though it was not approved by the Food and Drug Administration to treatment that condition. While doctors can use products like this for "off-label" or unapproved uses, companies are forbidden by federal law from marketing unapproved uses.

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