St. Jude Medical ($STJ) is under the Department of Justice microscope again for alleged kickbacks given to physicians for implanting its cardiac devices in patients, the company said in a regulatory filing.
It is the third ongoing governmental probe initiated against St. Jude Medical since 2010, according to an expanded quarterly report filed with the SEC. In early 2011, the company agreed to pay $16 million to settle claims related to a similar kickback scheme. That investigation lasted 5 years.
The St. Paul, MN-based company said in the filing that it is under investigation for "allegations that certain health care facilities and a physician group may have submitted false claims to federal health care programs as a result of alleged inducements" paid to them. No additional details of the case were cited, and the company noted that it hasn't recorded any expenses related to potential damages in the three DOJ investigations.
|Leader of St. Jude's companywide R&D division Eric Fain|
Earlier this year, St. Jude announced a major shakeup in its top ranks that resulted in merging its cardiovascular and implantables divisions into a single, companywide R&D division. Eric Fain was named to lead the combined division, replacing Frank Callaghan, the former head of the Cardiovascular and Ablation Technologies Division. Previously, Fain headed the Implantable Electronic Systems Division.
The reorganization was attributed to St. Jude's efforts to streamline the company toward more profit. In 2013, the company's stock rose more than 70%, though net sales for the full year were relatively flat at $5.501 billion compared to the $5.503 recorded in 2012.
- read the SEC filing