Judge Says No to Guidant Guilty Plea

We recently wrote that two doctors urged a federal judge not to accept a guilty plea by Boston Scientific’s Guidant unit for withholding information about <"http://www.yourlawyer.com/practice_areas/defective_medical_devices">faulty defibrillators from federal regulators. Now, the Associated Press (AP) is reporting that the plea deal—in which Guidant would pay $296 million for not disclosing information on changes it made its implantable heart devices—was rejected. Judge Donovan Frank said Guidant did not fully answer for its criminal conduct and did not put either Guidant or Boston Scientific on probation, said the AP.

The plea deal was filed in early April, sought the biggest criminal penalty against a medical device maker, and called for Guidant having to plead to “two misdemeanor counts” for submitting a false and misleading report to the Federal Drug Administration (FDA) about one defibrillator model, and failing to notify regulators about a safety correction to another line of devices,” said the AP.

The two doctors who fought the rejection, treated a male patient who died after his Guidant device “malfunctioned,” said the AP; the doctors criticized the deal saying Guidant should not get off by just playing a fine. In a letter to Judge Frank of the U.S. District Court of Minnesota, Drs. Robert Hauser and Barry Maron, both prominent cardiologists, wrote that the plea agreement does not go far enough in holding the parties responsible for the defibrillator debacle accountable.

Boston Scientific agreed in November to plead to the charges and pay $296 million—the largest criminal penalty against a medical device company—to resolve the Guidant charges with the U.S. Department of Justice. Boston Scientific acquired Guidant in 2006 for $28.4 billion.

“To allow a repeat offender, like Guidant, to escape with a fine (that is entirely borne by the shareholders of Boston Scientific) does not hold the guilty parties fully accountable and inevitably undermines patient safety,” the doctors wrote, quoted the AP. “Manufacturers are the first to know when a medical device is dangerous or underperforming. Thus, it is in the best interest of patients, and society in general, for manufacturers to be liable for the safety and effectiveness of their products,” the doctors added.

The Department of Justice investigation that resulted in the proposed settlement centered on three Guidant devices that had the potential to short-circuit—the Ventak Prizm 2 DR (Model 1861) and the Contak Renewal (Models H135 and H155) models of implantable defibrillators. According to the charges filed in federal court, Guidant violated the Food, Drug and Cosmetic Act by concealing information from the FDA about catastrophic short-circuiting failures in the three models. The company discovered problems with one of the products in 2002 and became aware of problems with two others in 2004, the department said.

Three safety alerts were issued about these defibrillators in June 2005. The FDA later determined these were Class I recalls, which are the most serious type of device recall because there is a reasonable change the devices could cause serious health problems or death. Malfunctions in the products were linked to multiple deaths.

Judge Frank said patients were not directly harmed by the two issues and prosecutors pointed out that patients can pursue other avenues for compensation, namely private lawsuits, wrote the AP. Judge Frank also said Guidant and the government can submit a modified plea agreement and that the device maker can withdraw its plea, which would enable the judge to “dispose of this case even less favorably than the Plea Agreement contemplated,” quoted the AP. Prosecutors are currently reviewing the decision, said the AP, citing a spokeswoman for the U.S. attorney’s office in Minnesota.

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