Boston Scientific pays $22 million to end U.S. Justice Department probe

ARDEN HILLS, Minn. — Boston Scientific Corp. said it will pay $22 million to settle a federal investigation into whether its Guidant cardiac rhythm unit paid doctors to recommend faulty heart devices it later recalled.

In a statement, Boston Scientific, based in Natick, Mass., said it admitted no wrongdoing. The company noted the investigation, conducted by the U.S. Attorney’s office in Boston, began a year before it purchased Guidant Corp. for $27 billion in 2006. Guidant makes pacemakers and defibrillators at its Arden Hills plant in Minnesota.

Federal prosecutors have been probing whether Guidant paid illegal kickbacks to doctors to recommend through “post-market surveys” its Ventak Prizm 2 and Contact Renewal 1 and 2 models, devices at the heart of the recall.

The civil settlement brings to a close a host of financial and legal headaches that Boston Scientific inherited from the acquisition. In 2005, Guidant recalled more than 300,000 pacemakers and defibrillators after the death of a Minnesota man whose pacemaker short circuited and failed to shock his heart back into rhythm.

Last month, Boston Scientific agreed to pay $296 million and plead guilty to two misdemeanor charges of not providing proper product information to the Food and Drug Administration.

The recall led to sweeping scrutiny over regulatory lapses and questionable business practices within the medical device industry, ranging from how companies report safety data to payments that pose conflict of interest problems for doctors.

Sen. Chuck Grassley (R-Iowa) has been leading investigations into whether medical device makers like Medtronic Inc. of Fridley, Minn. improperly used consulting fees to influence which devices doctors recommended to patients.