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Stent maker paying $22m to end probe

Boston Scientific’s Guidant unit used kickbacks, US says

By Cary O’Reilly
Bloomberg News / December 24, 2009

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WASHINGTON - Boston Scientific Corp., the world’s biggest maker of heart stents, has agreed to pay $22 million to settle allegations the company’s Guidant unit used clinical studies to pay kickbacks to doctors for using its products.

Guidant paid physicians $1,000 to $1,500 each to participate in one of four studies it said were designed to assess the performance of pacemakers and defibrillators, the US Department of Justice said yesterday in a prepared statement.

In reality, the company was paying doctors to select Guidant devices over competing products, the government said.

“Although medical-device and pharmaceutical companies can use postmarket studies legitimately to obtain information about how their products work in the field, they cannot use those studies, and the honoraria associated with them, to induce physicians to use their products,’’ the US attorney in Boston, Carmen Ortiz, said in the statement.

Boston Scientific, based in Natick, Mass., will enter into a corporate integrity agreement, which requires its cardiac rhythm management unit to disclose payments to doctors on its website.

“This civil settlement brings to a conclusion an investigation that began in 2005 and involved no admission of wrongdoing by the company,’’ Boston Scientific said in a statement.

The company agreed last month to pay $296 million to settle a Justice Department investigation into Guidant’s handling of heart devices and restated third-quarter results.

In 2007, Boston Scientific agreed to pay $240 million to settle more than 8,000 lawsuits claiming that Guidant hid defects in defibrillators, which are devices that shock the heart back into a regular rhythm.

Boston Scientific stock rose 2 cents to $8.82. The shares have risen 14 percent this year.