Guidant’s chief executive will receive a $1.5 million bonus after the acquisition by Boston Scientific is complete, according to documents filed with the U.S. Securities and Exchange Commission.
Since June, Guidant has recalled or issued safety advisories on about 88,000 defibrillators and more than 200,000 pacemakers. At least seven deaths have been linked to the faulty devices.
I guess that qualifies for an outrageous bonus!
Now that Boston Scientific, the maker of medical devices, has been publicly chastised by the FDA, its executives have taken a penitential tone. “It’s clear we have not done enough to resolve the issues raised by the F.D.A., “a spokesman, Paul Donovan, said in a statement yesterday, “and we recognize fully that the responsibility to do so lies with us.”
Boston Scientific fresh off its acquisition of Guidant Corporation, has been sent a warning letter by the FDA. Federal regulators said they discovered problems in the medical device maker’s quality control. FDA officials who announced the warning involving Boston Scientific said it was only the third time in the agency’s history it has issued such a broad companywide warning involving a medical device company’s systems to identify potentially defective and unsafe products.
“We are directing them to resolve these serious violations promptly, and to do it not as it relates to specific products … but rather to do it on a corporate-wide basis,” said Daniel G. Schultz, director of the Food and Drug Administration office that regulates medical devices.
Natick-based Boston Scientific said it was cooperating with the FDA and hoped to fix the problems promptly.
Guidant spokesman Steve Tragash said his company had been aware of the issues from its due diligence talks with Boston Scientific in recent weeks.
“We do not expect this development to interfere with the progress of the pending merger between Guidant and Boston Scientific,” Tragash said.
The FDA found violations in responding to doctors’ reports about possible product defects and Boston Scientific’s reporting of quality control issues at three Boston Scientific plants the agency inspected late last summer. The FDA also said the company’s efforts to fix problems at three other sites cited in previous FDA warnings were inadequate.
An attorney suing Guidant Corporation has been ordered by the Justice Department to turn over the documents he received from the company. The subpoena, part of the federal government’s investigation into the Indianapolis-based company, requires Texas attorney Bob Hilliard to turn over handwritten notes and PowerPoint slides. He obtained them from the company during preparations for a product liability case in Texas state court.
The 10 pages include notes from Fred McCoy, president of Guidant’s cardiac rhythm management division, that show a decision was made to sell inventory the executive described as having sporadic “life-threatening” defects.
“It’s consistent, bad decisions based on profit, not patient health,” Mr. Hilliard said. “The documents I received from Guidant showed they were basically making the equivalent of the Ford Pinto.”
Guidant spokesman Steve Tragash declined to comment.
On January 19, 2006, a Texas judge ordered Guidant to hand over internal documents that might show the company continued to sell some of its heart defibrillator models after knowing that the devices might prove faulty. The NY Times reported the following day that the documents appear to show that some Guidant executives recommended in January 2005 that perhaps the company should find a way to inform doctors about failures associated with one of its heart defibrillators. Almost six months later, Guidant publicly announced that a design flaw could cause the defibrillator to short circuit.
All of this comes as the bidding war to take over the embattled company continues. Profits rise as people suffer. When corporate greed and wrongdoing are not reined in, we all suffer and people die.
In documents filed in a Texas lawsuit against Guidant, the manufacturer of implantable defibrillators, the company failed to disclose publicly that Guidant officials had projected that some patients might die because of short circuits in their implantable defibrillator. According to the documents, Guidant did not disclose the information because the overall failure rate was not worthy of public disclosure. One might ask, “How many deaths warrant a ‘high enough failure rate'”?
According to an article published in the Minneapolis-St. Paul Business Journal
Guidant heart devices have been linked to three new deaths. The information arose out of a Guidant report to the US Food and Drug Administration. The deaths occurred after Guidant had recalled the devices in June.