Boston Scientific Sold Defective Stints Amid Alarming Data / 22% Medical Device Follow-up Not Done – Boston Globe
Mon, 27 Dec 2004
Two reports in The Boston Globe raise concern defective medical devices – including cardiac stents, pacemakers and other medical devices–are proliferating the marketplace before their safety has been fully tested. Like drugs, once approved for marketing manufacturers ignore FDA-required follow-up studies because the agency is incapable / unwilling to enforce safety requirements. This regulatory black hole has resulted in criminal marketing of drugs and medical devices that the manufacturers knew to be defective.
The Globe reports that at the same time that Boston Scientific Corp became the region’s largest life sciences company, with its stocks market value at $30 billion, BSC has been at the center of a secret criminal investigation by the Department of Justice for knowingly selling defective coronary stents. Within the first week of shipping a new stent model in 1998, the company received reports of 17 balloon failures from doctors and hospitals: “As cardiologists across the country began to report failures in which a patient died, another had a heart attack, and another needed open-heart surgery, the company shipped thousands more.”
Little was known about the six year criminal investigation by the DOJ until Chief Judge William G. Young of US District Court in Boston issued a detailed ruling in March. The Globe reports that “During a conference call on Sept. 17, 1998, with advisers and business partners to discuss how to respond to the growing problems, Boston Scientific’s chairman and then-chief executive, Peter Nicholas, portrayed the crisis in stark terms. Citing the company’s tests indicating that a key part of the stent failed 1 in 10 times, Nicholas said, “We’re in fact shipping adulterated product, and we cannot do that.” However, the company decided to keep shipping thousands of defective coronary stents while it negotiated with the FDA to avoid / delay a recall.
Notes taken by the company’s outside lawyer, Larry R. Pilot, with the Washington, D.C., firm of McKenna Long & Aldridge LLP, indicate that he urged a recall, noting that the device would not pass FDA standards: “There is no doubt in my mind that when the agency learns about what we know — namely that by our change in the manufacturing process, we introduced a defect into the product — that they will expect” a recall, he said. “I don’t know how the agency could rationalize accepting our continued distribution of a product for which the defect rate might be 10 percent.”
But Pilot was overruled and the defective stents continued to be shipped. Indeed, shipping continued even after BSC had negotiated with the FDA and had agreed to recall. Judge Young : “One who argues that violation of a criminal statute is not a crime has a very long row to hoe. It is well-nigh impossible to argue against the criminality of intentional shipping of a product that is more dangerous to health than its label suggests.”
Another report by The Globe indicates that 22% of medical device follow-up studies that are required by the FDA are left undone.
Daniel G. Schultz, director of the FDA’s office of device evaluation is quoted saying: “It’s not a pretty picture.”
“Exactly how much oversight the FDA has given to approved products is becoming a political issue. Post-approval studies are routine in theory and rare in practice, an open secret in the healthcare industry. In a report to Congress in March, for instance, the FDA said companies had agreed to conduct 1,338 post-approval drug studies. But 65 percent of them had not begun and just 33 percent were on schedule or had been completed.”
Although Mr. Schultz wants to improve device safety standards, he does not have the power to enforce safety requirements–only Congress can rein in an unscrupulous industry that markets hazardous medical products.
Contact: Vera Hassner Sharav
The Boston Globe
Stents sold despite high failure rates
BSX held off recall amid alarming data
By Jeffrey Krasner, Globe Staff | December 26, 2004
Boston Scientific Corp. shipped millions of dollars worth of coronary stents in fall 1998 even after company officials learned that the medical devices had high failure rates and may not have met specifications approved by the Food and Drug Administration.
As cardiologists across the country began to report failures in which a patient died, another had a heart attack, and another needed open-heart surgery, the company shipped thousands more.
During a conference call on Sept. 17, 1998, with advisers and business partners to discuss how to respond to the growing problems, Boston Scientific’s chairman and then-chief executive, Peter Nicholas, portrayed the crisis in stark terms. Citing the company’s tests indicating that a key part of the stent failed 1 in 10 times, Nicholas said, “We’re in fact shipping adulterated product, and we cannot do that.”
Nicholas said that while he did not think safety was an issue, the company had no choice but to recall the stent. But by the end of the 45-minute call, he and the others decided instead to try to convince the FDA that the company could solve the problem without a full-scale recall.
It was not until 2 weeks later, Oct. 5, that Boston Scientific recalled the stents.
The decision by the region’s largest life sciences company to keep shipping thousands of stents while it negotiated with the FDA to avoid a recall is at the core of a criminal investigation by the Department of Justice.
Boston Scientific disclosed the existence of the investigation in late 1998 but little else. But an unusual federal court ruling this year sheds new light on what happened between the introduction of the product and the recall two months later.
The ruling refers to a tape recording, made secretly by one of the participants, in which Nicholas’s comments are heard.
The Globe has listened to a copy of the tape and has also used Securities and Exchange Commission filings, FDA reports, internal Boston Scientific documents, and interviews with some key players and their attorneys to piece together the chain of events.
The company and the Justice Department declined to comment on specifics of the investigation or any possible settlement.
Paul Donovan, the company’s senior vice president for communications, said, “Although we did not believe the safety of the product had been compromised, we promptly notified the US Food and Drug Administration and two weeks later voluntarily recalled it.” In its most recent quarterly filing, the company said it thinks that it “acted responsibly and appropriately.” Boston Scientific also said it set aside $75 million for “legal and regulatory exposures” but did not say what it was for.
An attorney for Nicholas, Robert B. Fiske Jr. of Davis Polk & Wardwell in New York, said his client “acted in complete good faith in reliance on the fact that the company’s regulatory experts and its outside counsel all agreed that in light of the safety of the product, going to the FDA with all the facts instead of withdrawing the product was an appropriate way to proceed.”
Boston Scientific has grown dramatically over the past five years, largely on the success of its coronary stent business. This year, it introduced the Taxus drug-coated stent and pulled ahead of rival Johnson & Johnson in the $4 billion stent market. Its stock market capitalization of about $30 billion makes it by far the most valuable life sciences company in Massachusetts.
The Justice Department’s six-year investigation of the 1998 recall has taken place in the sealed chambers of a federal grand jury. Along the way, Boston Scientific fought the government’s request that it turn over notes made by an outside lawyer during the Nicholas conference call and other calls.
“After investigating for six years, the Justice Department and FDA concluded the evidence does not support taking action against any individual,” Andrew Good of Good & Cormier in Boston, attorney for Boston Scientific chief development officer Arthur L. Rosenthal, said in a prepared statement.
On March 16, Chief Judge William G. Young of US District Court in Boston issued a lengthy ruling with a detailed exploration of the investigation. To avoid compromising the government’s investigation and to maintain the secrecy of the proceedings, the judge disguises the names of the parties. Boston Scientific is called XYZ Corp. Company officials are referred to by their titles — Nicholas is “XYZ CEO” — while outsiders are given fanciful names. The stents themselves are called “widgets.”
Lawyers involved in the case and others familiar with the investigation confirmed the ruling is about Boston Scientific’s 1998 problems with the stent.
In 1998, Boston Scientific was a medium-size medical device company looking to hit it big. The NIR stent was to be the Natick firm’s crucial entry into the burgeoning market for coronary stents, the tiny, wire mesh sheaths that hold coronary arteries open after they have been cleared of blockages in a procedure called angioplasty.
In a standard stenting procedure, a cardiologist working through an opening in the patient’s groin maneuvers a stent into position inside tiny coronary arteries that feed blood to the heart muscle. The doctor inflates a balloon within the stent by filling it with high-pressure bursts of saline solution. That expands the stent to full size, moving the blockages aside and keeping the artery propped open.
On Aug. 11, 1998, at 4:30 p.m., Rosenthal received a fax from the FDA: a smiley face and the message “Congratulations!” on the cover sheet indicated that it was the highly anticipated approval of NIR ON Ranger stents. The stents came in two versions: one, called NIR ON Ranger W/ SOX, had plastic sheaths covering the ends of the stent. It was that model that became plagued with problems and is the subject of the investigation.
But within the first week of shipping, the company got reports of 17 balloon failures from doctors and hospitals. More kept coming. In some cases, the balloon problems resulted in critical medical emergencies, according to “adverse event” reports filed by doctors and hospitals with the FDA. Sometimes, pinhole leaks in the balloon allowed the inflating solution to spray into the wall of patients’ arteries, causing scratches or tears.
“While an NIR stent was being deployed in a right coronary artery, it became evident that there was a pinhole leak in the delivery balloon,” creating a “large, deep” tear extending several inches, according to an FDA report from Sept. 11, 1998. Doctors treated the tear with additional stents. In doing so, one branch of the coronary arteries was blocked. The patient suffered a heart attack but survived.
A Sept. 16, 1998, report described how a balloon rupture created a tear that doctors repaired with six additional stents. Eleven days later, after reporting chest pain, the patient was returned to the cardiac catheterization lab, where an angiogram indicated a serious blood clot. The patient, who was not taking an anticoagulant because of drug interactions with cancer treatments, died.
As the reports mounted, Boston Scientific tried to find out what was wrong. The company pulled 200 stents off the shelf and subjected them to particularly stringent tests. Ten percent experienced balloon failures.
Faced with the growing number of malfunctions and unable to screen out potentially faulty balloons, Nicholas decided to recall the stents Sept. 16, according to a prosecutor’s report cited by Judge Young.
The next day, Nicholas convened the conference call. It included the two principals of Medinol Ltd., an Israeli company that supplied a key component of the device. At one point, Judith Richter, Medinol’s chief executive, interrupts the conversation to shush her dog, which is barking in the background.
Nicholas’s position was clear: The stents were helping patients and the rate of medical complications was lower than a competitor’s stent, but there was no way to avoid a recall. The issue, he said, was not one of patient safety. But he did not think the new stent met its FDA-approved specifications.
“It is not arguable that it doesn’t meet the spec,” Nicholas said. “The issue is an internal issue of our manufacturing process failing to produce a product which meets specs which we therefore don’t feel we can ship.”
Larry R. Pilot, a lawyer with the Washington, D.C., firm of McKenna Long & Aldridge LLP who advised Boston Scientific on how to deal with the FDA, urged the company to pull the product off the market. FDA approval of a medical device like a stent includes inspection and certification of the entire manufacturing process. But Boston Scientific had made a change to the way it secured the balloon to the stent. Now there was concern that the change had contributed to the balloon failures.
“There is no doubt in my mind that when the agency learns about what we know — namely that by our change in the manufacturing process, we introduced a defect into the product — that they will expect” a recall, he said. “I don’t know how the agency could rationalize accepting our continued distribution of a product for which the defect rate might be 10 percent.”
In an interview, Pilot declined to comment on the investigation and would neither confirm nor deny his participation in the phone call. It was his notes from that call and others sought by prosecutors that led to Young’s ruling.
Nevertheless, Jacob “Kobi” Richter, Medinol’s chief technical officer, argued against a recall. Pinhole leaks would not necessarily prevent doctors from successfully deploying the stent, he said, and the rate of adverse events was well below those associated with a competitor’s stent. He belittled others who urged a more “conservative” path and worried that with a recall, the stent would be off the market at least half a year.
Ultimately, Nicholas engineered a compromise. The company would not recall the defective stents, and would not withdraw them, an intermediate step in which shipments are halted but stents already in hospitals could continue to be used. Instead, Boston Scientific would “engage” with the FDA and seek guidance on how to deal with the leaks. The company hoped such a strategy would minimize the time the product — a distinct improvement over existing stents — was kept from doctors and patients.
Boston Scientific’s first step was to send what is known among physicians and regulators as a “Dear Doctor” letter. In the letters, sent Sept. 17 and 18 to 2,000 doctors at 213 hospitals across the nation, a marketing executive said doctors could “minimize the occurrence and severity of balloon failures” by closely following the NIR stent’s instructions for use.
But in the conference call, Nicholas said the leaks were occurring even “with physicians who were using the device as intended, as indicated.” The letter to doctors did not mention the high rate of balloon failures the company found in its internal testing.
Government prosecutors have faulted Boston Scientific for not disclosing its internal test results in the letter, for implying that doctors were somehow to blame for the malfunctions, and for not acknowledging it had stopped manufacturing the stents as it sought to find the cause of the failures.
The following day, Pilot, the company’s outside attorney, called Dr. Susan Alpert, director of the FDA’s Office of Device Evaluation, which had approved the NIR stent. According to a list of talking points prepared for the call, he planned to tell her that the company needed “agency guidance.” He would point out that doctors liked the new stent and that a competitor’s stent had a higher rate of complications after its introduction about a year earlier. Later that day, according to prosecutors, Boston Scientific shipped NIR stents worth $2.66 million.
On Sept. 30, Boston Scientific sent a stent safety report to the FDA. It concluded, “The product failure rate does not represent an unreasonable risk to patient health and is within the range of rates estimated for currently available products.” But a chart showed the stent had far more complaints and injuries than another Boston Scientific stent, highlighting the impact of the pinhole leaks.
Meantime, the company kept shipping the stents, an average of $1.5 million worth each day, according to a prosecutors’s report.
Company officials finally met face-to-face with the FDA at the agency’s Rockville, Md., headquarters Oct. 5. A formal recall was finalized. Nonetheless, government prosecutors said, Boston Scientific shipped another $2 million of NIR stents later that day after it told the FDA it would halt shipping.
Debra Lano, regulatory vice president for Boston Scientific’s stent division, said the meeting with the FDA did not go well. After the meeting, she told Rosenthal, the chief development officer, that the company should have recalled the stent two weeks earlier.
He replied that Boston Scientific “had gotten two more weeks of sales” because of the delay, according to the judge’s ruling.
In a statement to the judge, Boston Scientific’s lawyer said Rosenthal’s comment, if it had been made, “obviously would have been gallows humor.”
Good, Rosenthal’s lawyer, said Rosenthal never made such a statement: “Dr. Rosenthal and others consulted with the FDA about whether and when to recall the product . . . [it] was safer than any of its competitors, notwithstanding the balloon pinhole problem.”
Three years ago, James Tobin, chief executive of Boston Scientific, predicted the outcome of the Justice Department’s investigation. In a deposition given in another case, Tobin, who joined Boston Scientific the year after the recall, said the investigation of the recall “would take another three to four years and that Boston Scientific would then settle with a consent decree and a fine.”
In his ruling, Young said Boston Scientific had to turn over the lawyer’s notes and could not claim attorney-client privilege, in part because the underlying behavior was so egregious.
“One who argues that violation of a criminal statute is not a crime has a very long row to hoe,” the judge wrote. “It is well-nigh impossible to argue against the criminality of intentional shipping of a product that is more dangerous to health than its label suggests.”
© Copyright 2004 The New York Times Company
The Boston Globe
22% of medical device follow-up studies left undone
By Ross Kerber, December 24, 2004
Nearly a quarter of follow-up studies required by the Food and Drug Administration for medical devices in recent years were never completed, according to a senior regulator who has launched a campaign to improve the ratio.
“It’s not a pretty picture,” said Daniel G. Schultz, director of the FDA’s office of device evaluation, earlier this month at a conference in Waltham. Too many of these studies are treated as “an afterthought,” he said.
At a time when the FDA is under fire for its oversight of drugs like Vioxx and Celebrex, which prompted health concerns after they were approved, Schultz’s comments show how companies that make products such as pacemakers and hearing aids can also expect more scrutiny.
Since Schultz has been pressing for more follow-up studies for over a year, his plans to improve the situation through public disclosure or bureaucratic reforms could be a model for the way the FDA treats drug companies in the future.
Exactly how much oversight the FDA has given to approved products is becoming a political issue. Post-approval studies are routine in theory and rare in practice, an open secret in the healthcare industry.
In a report to Congress in March, for instance, the FDA said companies had agreed to conduct 1,338 post-approval drug studies.
But 65 percent of them had not begun and just 33 percent were on schedule or had been completed.
“I am concerned that if companies do not comply with their responsibility to conduct post-market studies, then the public will never know if the products . . . are no better than sugar pills or even dangerous to their health,” wrote US Representative Edward J. Markey, Democrat of Malden, in a Dec. 20 letter to the FDA.
The issue wasn’t as great in the past when devices were introduced to the market more slowly than drugs, giving producers time to make small changes. But now big marketing campaigns mean thousands of people might begin a treatment like an artificial hip or pacemaker within weeks of its approval.
This can lead to widespread concerns, especially in the devices world where treatments can cause fast reactions. Earlier this year, for instance, Boston Scientific Corp. had to take 165,000 new drug-coated cardiac-stent systems out of inventory after a manufacturing flaw was linked to three deaths and more than 40 injuries. In 2003 the FDA notified doctors that a similar product from Johnson & Johnson was linked to more than 60 deaths, though the agency later determined the death rate was within an expected range.
Citing those examples, Schultz said in an interview after his speech to the Massachusetts Medical Device Industry Council that “When you have such incredible market penetration in such a short time, we need to make sure we’re asking a lot of questions about both products early in the process.”
Schultz cited an internal FDA study tracking devices from the start of 1998 to the end of 2000. It found that during that period the FDA approved 127 applications to market new medical devices, and in 45 cases required their makers to conduct post-market reviews.
But in ten of the 45 cases, or 22 percent, no follow-up results were submitted, said FDA spokeswoman Sharon Snider. The internal study didn’t specify what drug studies weren’t finished, or how many patients were supposed to be included, she said.
Joseph J. Leghorn, a Nixon, Peabody attorney who often represents the makers of devices, said another reason might be that many devices tend to treat just tens or hundreds of patients, fewer than most drugs, and that devices often are used only for a few years before they are replaced by newer therapies. Both factors leave fewer patients for follow-up studies, he said.
“There may be various reasons why studies don’t get completed,” Leghorn said. “I doubt people are ignoring their responsibilities.”
Other reasons might include a lack of funding from devices companies, which on average are much smaller than the multi-billion dollar companies that dominate the drug industry, or that patients aren’t interested in participating once they’ve been treated, Schultz said.
To improve the response rate, Schultz said he plans a shake-up, putting post-market studies in the hands of different staffers, and to try to improve the quality of work the FDA requests. For instance, an agreement with Johnson & Johnson to follow up on the use of its stents lacked precision on how it would be initiated and a timetable for its completion. “That was something we learned and corrected,” he said.
Schultz said the FDA also might start publicly reporting the status of all studies that have been required. So far the agency is not compelled to name companies that haven’t met obligations to complete follow-up studies, and its public affairs office declined to do so this month.
There are limits to how much the agency might lean on companies, however, Schultz said.
“As far as the sticks are concerned, one of the things that has always been difficult to conceive of is the idea that we would pull a product off the market just because a study wasn’t completed, absent a health risk,” he said.
Ross Kerber can be reached at email@example.com.
© Copyright 2004 The New York Times Company
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