Fry vs. Guidant Case

Wallace & Graham currently represents a “whistleblower” in a case brought against a medical device manufacturer claiming that the Medicare system was overcharged. The case is brought under the Federal False Claims Act. The case is brought against Guidant Corporation. Guidant makes medical devices such as pacemakers and defibrillators. These are known as “implant medical devices” or IMDs. IMDs help to regulate heart function and protect against heart failure.

The complaint alleges that Guidant caused the overcharging of the government Medicare system for IMDs in order to obtain more profits. The case is pending in the U.S. District Court for the Middle District of Tennessee. The Court has deemed the complaint to be a public record.

The plaintiff in the case is a former Guidant salesman, Robert A. Fry. He claims that Guidant IMDs included limited warranties that were shipped to hospitals in sealed containers and stored in hospital supply rooms. When the warranties were taken out during implant procedures, he alleges that Guidant representatives would throw away the warranties. He also alleges that Guidant acted in other ways to prevent Medicare from obtaining warranty benefits and credits available for the replacement of devices.

As a result, the lawsuit alleges that Medicare and Medicaid paid more than they would have if the credits had been given, and Guidant retained the credits as profits.

The case was originally brought against two medical device manufacturers, Guidant and Medtronic. Both companies moved to dismiss the case. In an Order dated April 25, 2006, the Court dismissed Medtronic but did not dismiss Guidant.

There was then a second motion to dismiss, by Guidant. The Court entered an Order on September 13, 2006, denying the motion.

In a False Claims Act case, the United States government generally has the right to “intervene” in the case, that it, to participate in the case. The Court allowed the government to intervene in an Order dated November 2, 2006.

For more information on False Claims Act and whistleblower cases, please contact Eddie Nicholson at our firm. He can be reached at 1-800-849-5291 or use this convenient form.