US sues Boston Scientific, alleging false claims by Guidant unit

The U.S. Department of Justice has joined a lawsuit against Boston Scientific which alleges the company's Guidant unit knowingly sold defective devices, even after engineers had found a fix for the problem.

The legal action comes just a few weeks after Boston Scientific's Twin Cities-based Guidant unit was ordered to pay $296 million and serve three years of probation for not telling regulators about potentially life-threatening defects in some implantable heart devices.

Now, the government is throwing its weight behind a parallel whistle-blower lawsuit. That lawsuit was filed by James Allen, a resident of New York. Allen had a Guidant device implanted in him.

The lawsuit alleges Guidant knew -- as early as 2002 -- that some of its heart devices might not deliver life-saving jolts. The government says Guidant fixed the problems but sold defective devices it had in stock.

Boston Scientific bought Guidant for $27.5 billion in 2006 -- and inherited its legal problems.

The government says Guidant hid problems with its defibrillators from patients, doctors and the Food and Drug Administration.

The government is seeking triple damages for medicare payments for the devices, but does not specify a total.

The suit cites 10 examples of payments ranging in amount from $20,000 to $46,000. The government alleges nearly 4,000 defective devices were implanted into patients in the United States, nearly half of them in Medicare patients. The defective devices are responsible for at least 13 deaths.

Boston Scientific said the conduct at issue took place from 2002 to 2005, well before Boston Scientific acquired Guidant in 2006.

The company said it was disappointed that the federal government after reaching a resolution of the criminal case concerning the devices, chose to seek additional money in a civil lawsuit.

But Boston Scientific said it believes the ultimate resolution of this lawsuit "should not have a significant financial impact."