MINNEAPOLIS (CN) – Shareholders of St. Jude Medical want corporate executives held responsible for the company’s $3.7 million settlement with the government over allegations of False Claims Act violations and rampant kickback schemes.
“The goal of the instant derivative action is to prevent corporate insiders from shifting all responsibility for the Company’s misconduct onto the backs of the innocent public shareholders, while they themselves walk away while paying nothing, and even voting themselves increased salaries and benefits,” the Louisiana Municipal Police Employees’ Retirement System claims in a shareholder derivative lawsuit in Federal Court.
Corporate executives allegedly paid kickbacks to doctors and hospitals that prescribed and used the company’s medical products, including pacemakers and mapping and visualization systems.
Disguised as post-marketing studies, the payments allowed St. Jude’s devices to be implanted in thousands of patients, netting the company millions in revenue, according to the lawsuit.
Physicians and hospitals were also given airplane tickets, sporting tickets, conference fees, and fine wines, according to the St. Paul-based pension.
The practice allegedly “tainted the treatment of many cardiac patients, and subjected seriously ill patients and others to unnecessary medical procedures designed to promote the use of St. Jude’s medical products.”
In June, St. Jude agreed to pay the United States $3.7 million to settle the claims.
Shareholders say the company’s officers and board of directors should be held accountable for not only failing to spot the misconduct, but also perpetuating the schemes.
Randall Roche is general counsel for the Louisiana Municipal Police Employees’ Retirement System.