St. Jude Medical ($STJ) and the Department of Justice may be close to resolving a dispute over allegations that the device company used studies to pay kickbacks to doctors, according to the Wall Street Journal. The case stems from a 2006 lawsuit filed by former employee Charles Donigian that alleged the company paid kickbacks to doctors, hospitals and other healthcare providers in the form of travel and tickets to sporing events to encourage them to prescribe certain St. Jude products, thus causing the providers to submit requests for payment to government programs.
Back in August, U.S. District Judge Douglas Woodlock in Massachusetts granted a government request to join the suit. Although the government had declined to join the suit in December 2009, U.S. Attorney Carmen Ortiz wrote that it had "good cause" to intervene following additional witness interviews and document reviews, according to a Reuters article.
The company has called Donigian "a disgruntled former employee" and said that the studies in question were legitimate. And Eric Dubelier, a partner with the law firm Reed Smith LLP representing St. Jude, didn't state a potential timeline while saying, "It ain't over till it's over." But it entered talks to avoid the ongoing costs and uncertainties that come from litigation with the government, according to the WSJ.
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