Federal prosecutors in Sacramento said Wednesday they obtained a $9.98 million settlement against Medtronic Inc. over allegations that the medical-device company improperly paid doctors to implant the company’s pacemakers and defibrillators.
The settlement, announced by U.S. Attorney Benjamin Wagner, stems from a 5-year-old lawsuit filed by a former Medtronic employee. The U.S. Justice Department eventually took over the case, but the employee, Adolfo Schroeder, will receive $1.7 million of the settlement under the whistleblower provisions of the federal False Claims Act.
Schroeder filed his suit in U.S. District Court in Sacramento even though he lives in Los Angeles and Medtronic is based in suburban Minneapolis. Sacramento attorney John R. Parker Jr., one of Schroeder’s attorneys, said the conduct alleged by Schroeder “was taking place all over California” as well as the rest of the country. Mychal Wilson, a Santa Monica attorney representing Schroeder, said another reason for choosing Sacramento was because the U.S. attorney’s office in the district has experience in these types of cases.
The settlement covers 24 states and the District of Columbia.
Medtronic didn’t admit to any wrongdoing in making the settlement.
According to the lawsuit, Medtronic induced doctors to use its products by paying them to speak at events, giving them tickets to sporting events and developing marketing plans for them at no charge.
“Improper financial incentives have the potential to compromise physician medical judgment,” said Stuart Delery, assistant attorney general, in a prepared statement.
According to Bloomberg News, Medtronic agreed to pay $130 million in 2007 to settle consumer lawsuits over alleged defects in its defibrillators. It agreed to another $268 million settlement in 2010 over allegations that faulty defibrillators caused the deaths of 13 patients.
Company officials weren’t immediately available for comment.
Call The Bee’s Dale Kasler, (916) 321-1066. Follow him on Twitter @dakasler.