Boston Scientific Settles Case of Defective Stent Systems

The Boston Globe reported that Boston Scientific has settled a suit brought by the US Department of Justice that alleged "a failure by Boston Scientific to take the most appropriate steps in a timely manner to ensure that the devices it was distributing to hospitals nationwide performed properly," per US Attorney Michael J. Sullivan.
Boston Scientific began shipping Nir coronary artery stent systems on August 12, 1998. Coronary artery stents are small devices, often shaped like springs, or wire mesh cylinders, used to hold coronary arteries open. According to the Globe, within five days, Boston Scientific got reports that the balloons attached to the stent catheters were failing when inflated to pressures lower than they were designed to handle. In a September 12, 1998 conference with US Food and Drug Administration (FDA) officials, one said that the FDA was "very uncomfortable" with continuing stent shipments." However, Boston Scientific continued shipping the stents until October 5, 1998, and then began a voluntary recall. The FDA finally received 25 complaints that injuries were caused by failed stent balloons.
The settlement called for Boston Scientific to pay $74 million. Department of Justice officials chose that amount since it significantly exceeded the $61 million revenue the company received from the 34,589 Nir stent systems it sold (i.e., $1764 per system.)
This case, which took almost seven years to resolve, could be compared with the recent case of problems with Guidant implantable coronary defibrillators (ICDs). (See most recent of many posts on Guidant here.) In both cases, the companies appeared to delay notification of device defects, leading to more potentially defective devices to be shipped and implanted in patients. In both cases, the devices seem relatively expensive compared to the complexity of their engineering and manufacturing. (For example, the stents mentioned above are again simple metal devices shaped link springs or mesh cylinders, and the accompanying system consists mainly of a plastic catheter with an inflatable balloon at its tip, sold for, as noted above, more than $1700.) Given how much money the companies charge for these devices, one would think they would be able to afford exemplary quality control, and a system to rapidly notify physicians who implant the devices of any potential problems.

Post Title → Boston Scientific Settles Case of Defective Stent Systems

Bursting the Balloons

Here's yet another story about how health care executives can hide bad news which might have slowed their cash flow, and then delay taking any responsibility for their actions.
Based on an ongoing grand jury investigation, The Boston Globe reported how Boston Scientific Corporation continued to ship coronary artery stents in 1998 even though its leaders knew that internal testing showed that 10% of the balloons used to insert the stents were failing. During a conference call, the Boston Scientific CEO admitted "we're shipping adulterated product, and we cannot do that." Instead of halting shipments, and recalling stents already shipped, however, Boston Scientific executives decided to "engage" with the FDA to delay a recall. The company also sent a "Dear Doctor" letter reminding physicians to insert the stents using proper procedures, which implied that stent failures were due to incorrect placement procedures. There was no evidence that this was the case. The letter failed to mention the balloons' 10% failure rate, or that Boston Scientific had made changes to the stent manufacturing process that the FDA had not approved. Meanwhile, Boston Scientific was shipping stents worth about $1.5 million a day, and physicians, unaware of these issues, were continuing to insert apparently defective stents from existing stocks.
The criminal investigation of Boston Scientific has gone on for six years without any clear results. The CEO of Boston Scientific, in fact, had predicted that it would be a long time before the company paid any penalty for its actions, "another three or four years and ... Boston Scientific would then settle with a consent decree and a fine."

Post Title → Bursting the Balloons