Boston Scientific Sued by U.S. Over Defibrillators at Issue in Guilty Plea

The U.S. Justice Department sued Boston Scientific Corp. and its Guidant units for allegedly knowingly selling defective implantable electronic heartbeat- regulating defibrillators.

Guidant, which Boston Scientific bought in 2006 for $27.5 billion, hid problems with its defibrillators from patients, doctors and the Food and Drug Administration, according to the lawsuit filed yesterday in Minnesota federal court. In February 2010, Guidant pleaded guilty to misleading the FDA about the problems. It paid a total of $296 million.

Guidant knew as early as 2002 that implantable cardiac devices known as Prizm 2 had a potentially life-threatening defect, yet it still sold them, the U.S. claimed. The company also knew as early as 2003 that its implantable cardiac device known as the Renewal had a similar life-threatening defect, and it sold them anyway, according to the complaint.

“Patients with serious heart conditions who depend on these devices should not have to second-guess whether they are safe and effective,” Tony West, assistant attorney general in the Justice Department’s civil division, said in a statement. Concealing the problems wasted taxpayer money and put lives at risk, he said.

Paul Donovan, a spokesman for Natick, Massachusetts-based Boston Scientific, said in an e-mail: “We have been aware of the government’s interest in this civil matter, and we have previously disclosed it in our regulatory filings. Guidant plans to respond to the government’s allegations and claims for damages in the appropriate fashion.”

‘Reasonably Foreseeable’

By selling defective devices when it was also selling corrected ones, “it was reasonably foreseeable” that defective versions would be implanted in Medicare patients, according to the complaint. Guidant “knowingly caused approximately 2,000 false or fraudulent claims to be submitted to the Medicare program,” the U.S. claimed.

The complaint cited 10 examples of false claims to Medicare for reimbursements ranging from $20,201 to $46,130. The U.S. seeks triple damages for all of the false claims.

The U.S. previously joined a lawsuit filed in 2008 under the False Claims Act by a whistleblower, James Allen, who had a device implanted. The law allows private citizens to sue on behalf of the government and share in any recovery.

Boston Scientific, the world’s second-largest heart-device maker, agreed in 2007 to pay $240 million to settle more than 8,000 lawsuits claiming Guidant hid defibrillator defects.

Guidant LLC pleaded guilty to misdemeanor charges of submitting false and misleading reports to the FDA and failing and refusing to report a medical device correction. The company was fined $253.9 million and forfeited $42 million. U.S. District Judge Donovan W. Frank accepted the plea on Jan. 12 in Minnesota.

The case is U.S. ex rel. Allen v. Guidant LLC, 11-cv-00022, U.S. District Court, District of Minnesota (St. Paul).

To contact the reporters on this story: Andrew M. Harris in Chicago at aharris16@bloomberg.net; David Voreacos in Newark, New Jersey, at dvoreacos@bloomberg.net.

To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net.

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