A settlement has been reached in a whistleblower class action lawsuit brought against Boston Scientific Corp and its subsidiaries, Guidant LLC, Guidant Sales LLC and Cardiac Pacemakers Inc. They are accused of knowingly selling defective heart devices to health care facilities that in turn implanted the devices into Medicare patients.
The whistleblower in this case will receive a $2.25 million share of the government's recovery.
The whistleblower filed this action in January 2011. The government's allegations against Guidant were that two lines of implantable cardiac devices manufactured and sold by Guidant, known as the Prizm 2 and the Renewal 1 and 2, contained a defect that resulted in “arcing.” Arcing occurs when the device detects the irregular heartbeat and delivers a shock, but instead of the current traveling to the heart, the current “arcs” back to the device itself. This causes the device to short circuit, rendering the device ineffective.
The government alleged that Guidant learned as early as April 2002 that the Prizm was defective, and as early as November 2003 that the Renewal 1 and 2 were similarly defective. Nevertheless, although Guidant took corrective action to fix the defects, the company continued to sell its remaining stock of the old, defective versions of the devices. The government alleged further that, as Guidant learned about the cause of the defect, it took steps to hide the problem from patients, doctors and the Food and Drug Administration (FDA). Instead of disclosing the problem, Guidant issued a misleading communication to doctors regarding the nature of the defect and did not fully disclose the problem with the devices to doctors and the FDA until May 2005, after first being contacted by a New York Times reporter. Subsequently, the company recalled the devices after a front-page article about the defects appeared in The New York Times.
