ST. PAUL,
MINN. (AP) — St. Jude Medical
Inc. will pay $16 million as part of a settlement with the
U.S. Department of Justice over allegations the medical device maker paid
kickbacks to physicians to implant its pacemakers and defibrillators.

According to the Justice Department, the company used three
post-market studies and a device registry to pay participating physicians
kickbacks of up $2,000 per patient to increase sales of its devices.

The company, which is based in St. Paul, did not admit liability or
wrongdoing under the settlement. It maintains that its post-market studies and
registries are legitimate clinical studies. The post-market studies asses the
clinical performance of a medical device or drug after it has been approved by
the Food and Drug Administration.

“Medical device and pharmaceutical companies can use
post-market studies legitimately to obtain information about how their products
work in the field, but they cannot use those studies, and the honoraria
associated with them, to induce physicians to select their products,”
Carmen Ortiz, U.S. Attorney for the District of Massachusetts, said in a
statement.

The company recorded $4.68 billion in revenue in 2009 and
analysts estimate that its 2010 revenue topped $5 billion. It said the
settlement will not have a material impact on its financial results.

Shares of St. Jude Medical rose 15 cents to close at $42.20.