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FOR IMMEDIATE RELEASE
Thursday, January 27, 2011
United States Files Suit Against Guidant and Boston Scientific for Selling Defective Heart Devices That Were Implanted in Medicare Patients

WASHINGTON – The United States has filed a complaint against Boston Scientific Corp. and related Guidant entities under the False Claims Act for conduct relating to certain of its cardiac devices, the Justice Department announced today. The United States alleges that Guidant sold cardiac devices, the Ventak Prizm 2 and the Renewal 1 and 2, even though Guidant knew the devices were defective. Despite Guidant’s fixing the defect in these lines of devices, the company continued to sell their remaining stock of defective devices anyway.

The devices at issue are implantable cardioverter defibrillators, which are designed to deliver therapy to prevent sudden cardiac death. The devices are surgically implanted into patients’ chests. When they detect an irregular heartbeat, the devices send an electrical pulse to the heart to "shock" it back to normal rhythm.

The government’s complaint alleges that Guidant hid the problems with their defibrillators from patients, doctors and the Food and Drug Administration (FDA). In February 2010, Guidant pleaded guilty to misleading the FDA about the problems in the devices. A district court in Minnesota accepted the company’s plea on Jan. 12, 2011. Guidant was acquired by Boston Scientific in 2006.

"Patients with serious heart conditions who depend on these devices should not have to second-guess whether they are safe and effective," said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. "When a medical device manufacturer conceals problems with its products, as is alleged here, not only is taxpayer money wasted, but lives are put at risk."

"When companies like Guidant request and receive federal dollars for products they know to be defective, the United States is committed to aggressively seeking the recovery of those payments. That is especially true when the defective products endanger human lives. In today’s environment, it is essential that Medicare and other public health care programs be made whole to ensure their continued vitality for future generations," said John R. Marti, First Assistant U.S. Attorney for the District of Minnesota.

The United States alleges that Guidant knew as early as April 2002 that an implantable cardiac device it manufactured and sold, known as the Prizm 2, contained a potentially life-threatening defect. The government’s complaint also alleges that Guidant knew as early as November 2003 that another implantable device it manufactured and sold, the Renewal 1 and 2, contained a similar, potentially life-threatening defect. Yet, the United States alleges that, even after Guidant took corrective action to fix the defects, the company continued to sell its stock of the old, defective versions of the devices. Moreover, as information about the cause and nature of the defect grew within the top ranks of the company, the United States contends that Guidant took steps to hide the problem from patients, doctors and the FDA. According to the government’s complaint, instead of disclosing the problem, Guidant issued a misleading communication to doctors that misinformed them about the nature of the defect.

The United States alleges that Guidant did not fully disclose the problem in the devices to doctors and the FDA until May 2005, after first being contacted by a reporter. The company subsequently recalled the devices shortly after a front-page article about the defects appeared in The New York Times.

The United States joined a lawsuit filed under the qui tam or whisteblower provisions of the False Claims Act by James Allen, who allegedly received one of the defective devices. Under the act’s qui tam provisions, a private citizen, known as a "relator," can sue on behalf of the United States and share in any recovery. The case is United States ex rel. Allen v. Guidant LLC et al., No. 11-CV-22 (D. Minn.).

This action is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $5.3 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 now exceeds $6.8 billion.

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Civil Division
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