Litigation

3 Years' Probation Added To $296M In Fines, Forfeiture In Guidant Heart Device Plea

MINNEAPOLIS - (Mealey's) Guidant LLC was sentenced Jan. 12 by a Minnesota federal judge to three years' probation and ordered to pay $296 million in fines and forfeiture for failing to tell the Food and Drug Administration about defects in three of its implantable cardioverter defibrillators (ICDs) (United States of America v. Guidant LLC, No. 10-mj-67, D. Minn.).

 In March, Guidant, a wholly owned subsidiary of Boston Scientific Corp., pleaded guilty in the U.S. District Court for the District of Minnesota to two federal misdemeanors for withholding information from the FDA about catastrophic failures in some of its Ventak Prizm 2 DR Model 1861 and Contak Renewal Models H135 and H155 ICDs.

At that time, Guidant agreed to the fine and forfeiture.  But Judge Donovan W. Frank in April declined to accept the plea, questioning whether Guidant should make restitution to victims of the company's action and whether the company should be put on probation.

Judge Donovan later decided that the plea would not include restitution but ordered a presentence investigation.  On Dec. 17, Judge Frank ordered Guidant to summarize its compliance activities, including changes made since the offenses occurred. 

The judge on Jan. 12 accepted the guilty plea, fine and forfeiture but added three years' probation to the sentence. 

The monetary settlement consists of $42,079,675 in forfeiture of assets and a criminal fine of $253,962,251. 

Under the probation requirement, Guidant must make quarterly reports to the U.S. Probation Office and submit to regular, unannounced inspections of its records by probation officers.  Guidant must also notify its employees and shareholders of its criminal conviction. 

The government alleged that Guidant knew about short circuits in three ICDs but failed, under federal law, to file a report with the FDA about the problems and about corrective action.

As many as 20,146 patients in the United States may have been implanted with the devices between late 2002 and June 2005, and of those patients, 2,657 are claimants in the Guidant products liability multidistrict litigation in the District of Minnesota, also overseen by Judge Frank.

ICDs are small electronic devices implanted under the skin in patients.  Leads -- types of wires -- are threaded through blood vessels to the heart.  When the patient experiences abnormal heartbeats, an electrical shock corrects the rhythm.

[Editor's Note:  Full coverage will be in the Jan. 20 issue of Mealey's Emerging Drugs & Devices.  For all of your legal news needs, please visit www.lexisnexis.com/mealeys.]

For more information, call editor Tom Moylan at 215-988-7739, or e-mail him at tom.moylan@lexisnexis.com.