St. Jude Medical: The Defect Information Behind the 2021 Settlement

In the St. Jude Medical battery settlement, the company agreed to pay $27 million to resolve allegations that it knowingly sold defective heart devices for implantation in patients insured by federal healthcare programs. The government alleged that St. Jude knew about premature battery failures, sought approval for a design change, and kept distributing devices made without that change. For someone who works with device complaints, manufacturing changes or sales, the question is familiar: what happened to the products already in the sales channel?

The Department of Justice announced the civil settlement on July 8, 2021. It covered alleged sales between November 2014 and October 2016. A patient who received one of the devices started the case as a whistleblower.

What Happened to the St. Jude Batteries?

Lithium clusters could form on the batteries, cause a short circuit and drain their power prematurely. The government’s allegations concerned certain models in the Fortify, Fortify Assura, Quadra and Unify families of implantable defibrillators.

The later reports to the Food and Drug Administration included losses of pacing as well as deaths associated with premature battery depletion.

The Justice Department alleged that St. Jude knew about lithium clusters and the resulting power drain by 2013.

What St. Jude Told the FDA

The government alleged that St. Jude asked the Food and Drug Administration to approve a battery design change while withholding information about serious injuries and a death. The request, made in late 2014, proposed a change to prevent lithium clusters from draining the battery.

According to the Justice Department’s account, St. Jude told the agency that no serious injury, permanent harm or deaths had been reported in connection with the issue. The government alleged that the company already knew of two reported serious injuries and one death associated with lithium-cluster battery depletion.

The contradiction is the heart of the reporting allegation. The company was asking the regulator to approve a fix while allegedly understating what had happened with the design it wanted to fix. The government contended that disclosure of the injuries and death would have led to a recall. Patients received the devices, and taxpayers paid for care involving products the government said should have been recalled.

According to the Justice Department, St. Jude continued distributing devices manufactured without the new design. In August 2016, it told the Food and Drug Administration that premature battery depletion events had increased to 729, including two deaths and 29 events associated with loss of pacing.

On October 10, 2016, St. Jude issued a medical advisory that the agency classified as a Class I recall. That classification means there is a reasonable probability of serious adverse health consequences, including death. The Justice Department said St. Jude stopped selling the older devices after the recall, but thousands had already been implanted during the period it described.

Changing future production and deciding what to do with existing devices were separate decisions.

How the Devices Reached Federal Health Care Claims

The government alleged that St. Jude caused false claims by selling defective devices to health care facilities that implanted them in patients insured by federal programs. It connected what the manufacturer knew to what facilities bought and used.

The buying arrangements explain why information given to physicians matters. The hospital or ambulatory surgery center ordinarily buys the implant, but the physician may make or strongly influence the choice of brand and device type. The Department of Health and Human Services’ Office of Inspector General describes that influence in its special fraud alert on physician-owned entities. The same division between buyer and chooser helps explain the St. Jude allegation: a warning withheld from the physician could matter to a purchasing decision made by the facility.

Medicare ordinarily pays the facility through a bundled payment for the care, with the implant included.

In St. Jude’s case, the alleged omission reached beyond a submission to the regulator: the older devices remained available for implantation. The manufacturer’s internal knowledge of the battery problem was information the whistleblower alleged never reached the clinician.

What the Whistleblower Alleged About Continued Sales

The whistleblower alleged that St. Jude corrected the battery problem in manufacturing while continuing to promote and sell defective implantable defibrillators. The complaint’s account of continued sales puts the commercial decision beside the technical correction:

The allegation reaches beyond inventory that happened to remain on a shelf. It describes continued promotion, marketing and sales after corrective action.

The complaint also alleged that the company gave health care providers no advisory when it took corrective action:

The complaint alleged that St. Jude supplied the patient’s device directly to the surgeon while knowing its battery was defective.

A company can change a manufacturing process without the physician selecting its product ever seeing the reason. Here, the whistleblower alleged exactly that gap.

Guidant Defibrillators and Withheld Safety Information

Guidant’s earlier defective-defibrillator case also connected alleged knowledge inside a manufacturer to devices used in Medicare patients. Boston Scientific and Guidant agreed to a $30 million civil settlement announced in October 2013.

The government alleged that Guidant sold devices it knew were defective. Its complaint also alleged that the company had withheld the full problem from doctors and the Food and Drug Administration until a reporter contacted it. A patient who had received a defective device brought the whistleblower case.

The parallel is the route the information took. In both civil cases, the government described defective devices reaching patients while the manufacturer allegedly held safety information that doctors had not received. That makes the physician’s knowledge at the time of product selection part of the payment story.

The Records Between a Battery Fix and an Implant

The St. Jude allegations put the design-change decision, safety communications and continued distribution in the same case. Each addresses a different question an insider may be able to answer: what the company knew, what it said, and which products it continued supplying.

For a quality or regulatory employee, the relevant comparison is between reports of battery failures and the account sent to the Food and Drug Administration. In this case, the government specifically alleged a mismatch between the reported injuries and death known inside St. Jude and its description to the agency. We examine how those accounts fit together and who made the decisions reflected in them.

For someone in manufacturing or distribution, the distinction is between devices made with the correction and devices made without it. The release describes older-design devices continuing through distribution. The complaint adds the allegation that they continued through active promotion and sales. Manufacturing-change and distribution records can connect those parts of the story.

On the clinical side, the complaint focuses on what the surgeon knew when selecting and implanting the device. Provider communications and the implant’s connection to a federally insured patient’s care complete a different part of the account. That is why we work from the product and the decisions around it through to the claim for payment.

An insider may know only one of those decisions well. Our work is to connect that knowledge to the other records and build the strongest supported account of how the government came to pay.

How Much Does a Medicare Fraud Whistleblower Get Paid?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. The 2020 review A Forensic Accountant’s Guide to the Most Potent Federal Laws Used Against Healthcare Fraud, published in the Journal of Forensic and Investigative Accounting, explains that whistleblowers can receive a share of the government’s recovery.

The St. Jude settlement ended a whistleblower case. A patient supplied the account of an implant and an uninformed surgeon. Someone inside the device business may hold the other side of that story: the safety information, the correction decision or the decision to keep selling.

When You Know Why the Battery Changed

If you saw a device corrected in production while the older version kept selling, speak with our whistleblower experts about the decisions and safety information behind those sales. We build your strongest supported case with you and bring in medical device fraud whistleblower lawyers who understand how a manufacturer’s conduct reaches a federal healthcare claim. We stay beside you as that inside knowledge becomes the case.