Nolan & Auerbach, P.A. Announces $16 Million Settlement of Whistleblower Case

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Today marks the announcement for settlement of Nolan & Auerbach P.A.’s client’s case against medical device-maker St. Jude Medical, Inc., which has agreed to pay $16 million to resolve civil allegations that it paid kickbacks to physicians to prescribe its products. Nolan & Auerbach successfully handled this case on behalf of the whistleblower with the assistance of the Boston law firms of Thomas & Associates and the Law Office of Suzanne E. Durrell.

St. Jude Medical will pay the Government $16 million to settle the allegations. The whistleblower will receive $2,640,000, plus accrued interest, from the settlement amount.

Today marks the announcement for settlement of Nolan & Auerbach P.A.’s client’s case against medical device-maker St. Jude Medical, Inc., which has agreed to pay $16 million to resolve civil allegations that it paid kickbacks to physicians to prescribe its products. Nolan & Auerbach successfully handled this case on behalf of the whistleblower with the assistance of the Boston law firms of Thomas & Associates and the Law Office of Suzanne E. Durrell.

Employed by St. Jude Medical as a technical service specialist from Fall 2004 through Spring 2007, Nolan & Auerbach’s client Charles Donigian was in a position to witness and detail the alleged widespread kickbacks and illegal inducements. Specifically, Mr. Donigian assisted with the marketing of cardiovascular medical devices, which included managing the completion of any required paperwork and patient enrollment documents related to purported post-market clinical studies being conducted by St. Jude Medical.

The complaint maintained that St. Jude Medical made payments to doctors ostensibly for the collection of data in connection with post-market clinical studies of the company’s products; however, the these payments were designed and used as a means of increasing sales of its devices over competitors, not as bona fide scientific research.

“Doctors are supposed to practice evidence-based medicine,” said Charles Donigian. “However, when research dollars are used as a sales tool, medical judgment is oftentimes clouded.”

In addition, the complaint alleged that St. Jude Medical shelled out payments to doctors for entertainment, tickets to sporting events, and other gifts and benefits. These alleged business practices caused government health care programs to pay millions of dollars for prescriptions that were tainted by illegal kickbacks.

“Our client provided detailed, inside information about alleged kickbacks to doctors,” said managing partner and former federal prosecutor Marcella Auerbach. “The simple fact is that whistleblowers are needed to unmask illegal payments, which are, all too often, disguised as payments for phony research studies.”

The federal Anti-kickback Act (AKA) prohibits any person or entity from making or accepting payment for referring, recommending or arranging for federally-funded medical items or services, including items or services provided under the Medicare, Medicaid, and TRICARE programs. The AKA arose out of congressional concern that the remuneration and gifts given to those who can influence health care decisions corrupts medical decision-making and could result in the provision of goods and services that are more expensive and/or medically unnecessary or even harmful to a vulnerable patient population.

“There are legitimate reasons for conducting post-market studies,” said founding partner Kenneth Nolan. “However, when a company uses these studies to influence a doctor’s prescribing habits, it potentially runs afoul of the Anti-kickback Act and the False Claims Act.”

Federal and State False Claims Acts allow private citizens with detailed knowledge of fraud to bring an action on behalf of the federal and state governments and to assist in the recovery of the governments’ stolen dollars. These statutes allow the government to recover three times the amount it was defrauded, in addition to civil penalties of $5,500 to $11,000 per false claim. Successful whistleblowers can receive between 15 and 30 percent of the governments’ recovery.

St. Jude Medical will pay the Government $16 million to settle the allegations. The whistleblower will receive $2,640,000, plus accrued interest, from the settlement amount.

The settlement was achieved through the coordinated efforts of the U.S. Justice Department and the Office of Inspector General of the U.S. Department of Health and Human Services. Specifically, the Government was represented by an exceptional team of government attorneys, including Assistant Director Jamie Yavelberg, U.S. Justice Department, Civil Division, Commercial Litigation Branch; Trial Attorney Thomas Morris, U.S. Justice Department, Civil Division, Commercial Litigation Branch; U.S. Attorney Carmen Ortiz, U.S. Attorney’s Office in the District of Massachusetts; Assistant U.S. Attorneys Gregg Shapiro and Donald Savery, U.S. Attorney’s Office in the District of Massachusetts; and Assistant Inspector General for Legal Affairs Greg Demske, Office of Inspector General of the U.S. Department of Health and Human Services.

The whistleblower’s case is United States ex rel. Donigian v. St. Jude Medical, Inc., No. 06-CA-11166-DPW (D. Mass.).

Other cases of Nolan & Auerbach, P.A. clients which have resolved in the past six months include United States et al., ex rel. Beilfuss et al. v. Allergan, Inc., No. 08-CV-1883 TWT (N.D. Ga.); United States et al., ex rel. Conrad et al. v. Forest Pharmaceuticals, Inc, et al., No. 02-CV-11738-NG (D. Mass.); United States et al., ex rel. Austin et al. v. Novartis Pharmaceuticals Corporation, No. 8:03-CV-1551-T-30-TGW (M.D. Fla.); and United States ex rel. Thompson v. Woodhaven Pharmacy Services, LLC d/b/a Remedi Seniorcare, Inc., No. WMN-09-0131 (D. Md.). Collectively, these cases have generated over $1.3 billion in recoveries to the U.S. and state treasuries.

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