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US Sues Boston Scientific Over Guidant Devices

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NATICK, MA - DECEMBER 05:  A sign on the front gate of Boston Scientific Corp. headquarters is seen December 5, 2005 in Natick, Massachusetts. The company offered $25 billion for Guidant Corp., $3 billion more than what Johnson & Johnson agreed to pay last month.  (credit: Joe Raedle/Getty Images)

NATICK, MA – DECEMBER 05: A sign on the front gate of Boston Scientific Corp. headquarters is seen December 5, 2005 in Natick, Massachusetts. The company offered $25 billion for Guidant Corp., $3 billion more than what Johnson & Johnson agreed to pay last month. (credit: Joe Raedle/Getty Images)

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MINNEAPOLIS (AP) — The U.S. government sued Boston Scientific Corp. on Thursday, alleging its Guidant unit knew some of its implantable heart devices were defective but continued to sell them anyway, putting patients’ lives at risk.

In a complaint filed in federal court in Minnesota, the government alleges Guidant knew as early as April 2002 that one model of its implantable cardioverter defibrillators might not deliver a life-saving jolt when needed. A similar problem was found in another model in 2003.

The complaint alleges Guidant fixed the problems, but continued to sell the defective devices it had in stock. It also did not recall the devices already on hospital shelves. In addition, the complaint alleges the company hid the issue from patients, doctors and the Food and Drug Administration and continued to file for Medicare reimbursements for defective implants.

“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 for the Department of Justice’s Civil Division, said in a statement.

Boston Scientific spokesman Paul Donovan said in an e-mailed statement that the company has “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 claim for damages in the appropriate fashion,” Donovan said.

The government alleges Guidant violated the False Claims Act by submitting false or fraudulent claims to the Medicare program. The government says roughly 2,000 false claims were submitted to Medicare for patients who had the defective models implanted.

The U.S. wants that money back, saying those claims were not eligible for reimbursement because Medicare payments aren’t allowed for items that aren’t “reasonable and necessary.”

The U.S. is seeking unspecified damages plus civil penalties on behalf of the Department of Health and Human Services and the Centers for Medicare & Medicaid Services, which administers the Medicare program.

In filing its complaint, the government joins a lawsuit already filed by a man who allegedly received one of the defective devices. James Allen sued in 2008 under a whistleblower provision that allows a private citizen to sue in the name of the government. For practical purposes, the government will take the lead on the case and Allen would share in any recovery.

The devices at issue are Ventak Prizm 2 and Contak Renewal 1 and 2 defibrillators, which monitor for deadly irregular heartbeats and shock the heart back to a normal rhythm.

The lawsuit alleges Guidant did not fully disclose the problems with the devices until May 2005, after two doctors investigating a patient’s death went to the media. An article in the New York Times led to a recall of the defective models.

Thirteen deaths can be potentially attributed to the defects, the government says.

In a related criminal case, Guidant pleaded guilty last year to two misdemeanors for misleading the FDA about the problems with these same devices. The company was ordered last month to pay $296 million in fines and fees and serve three years of probation.

John Marti, first assistant U.S. attorney for the District of Minnesota, said the government will aggressively go after companies that seek federal dollars for products they know to be defective.

“That is especially true when the defective products endanger human lives,” he said. “It is essential that Medicare and other public health care programs be made whole to ensure their continued vitality for future generations.”

Boston Scientific acquired Guidant in 2006.

(© Copyright 2011 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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