The QSE UPDATE

The QSE UPDATE is published each quarter on this Website. It is intended to provide information, discussion and commentary on current topics of interest to individuals working in the medical device and diagnostics industry. Please visit our site each quarter to view the latest update.

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Are You Feeling Lucky?

by Rich Bliss, QSE President

On April 5th, Medical Device Manufacturer, Guidant, pleaded guilty in the US District Court in Minneapolis, MN for not reporting defibrillator safety problems to FDA.  Guidant, a wholly-owned subsidiary of Boston Scientific Corporation, was charged in federal district court on Feb. 25, 2010. The guilty plea agreement was then filed with the court on March 11, 2010. The resultant guilty plea on April 5, 2010 will cost the firm and the parent company more than 296 million dollars according to the press release issued by the FDA's Office of Criminal Investigations. 

Under the terms of the plea agreement with the Justice Department to resolve the charges, Guidant pleaded guilty today to withholding information from the U.S. Food and Drug Administration (FDA) regarding catastrophic failures in some of its lifesaving devices. Specifically, Guidant admitted to:

(1) making a materially false statement in a required submission to the FDA with regard to the Ventak Prizm 2DR device; and

(2) failing to notify the FDA of a "correction" to the Contak Renewal devices, which the company made to reduce a risk to health caused by the devices.

As a result of these offenses, the agreement calls for Guidant to pay a combined criminal penalty in excess of $296 million.

The press release from the FDA website continues; "Today's entry of a guilty plea by Guidant LLC and the proposed resolution would represent the largest criminal penalty ever imposed on a medical device manufacturer for violating the Food Drug and Cosmetic Act,” said Commissioner of the Food and Drug Administration, Margaret A. Hamburg, M.D. “The FDA will continue to commit enforcement resources to seeking this type of criminal resolution and stiff sanctions when device manufacturers fail to adhere to the statutory and regulatory requirements that exist to ensure the safety and efficacy of their products.”

“Guidant’s guilty plea today is about accountability,” said Assistant Attorney General Tony West, who heads the Justice Department’s Civil Division. “This successful prosecution serves as an important wake up call to all those who seek to withhold vital information about public health and safety. We will continue our efforts to prosecute those who jeopardize public health by evading their reporting obligations to the FDA.”

One certainly has to wonder if all of the resultant stress and sleepless nights that likely accompanied this prosecution were worth it to those employees and management of the firm as they reflected on how and why this situation ever occurred.  How did something as important as patient safety and public health issues not get reported to FDA?  Was this a fault of Management with Executive Responsibility?  Was this a fault of the Quality System?  Is it possible that no one had sufficient understanding of the requirements of the Medical Device Reporting or Corrections and Removals, regulations? The answers to these and other questions may be forthcoming in future weeks and months and may further explain just exactly what happened.

In the meantime these events should cause us all to look at our own compliance situation to see if we also have the potential for significant risk.  Significant risk that can be detrimental, not only to the financial health and well being of our company, but also risk of a significant public health issue that may result in negative press and goodwill toward our company.  I know as many of you read this you will think to yourselves that your company is in great shape and on solid compliance footing.  I also know that many companies that feel this way are at risk as a result of their company culture and "routine" practices that have not kept pace with changes in the every evolving regulations and requirements of our industry.  These companies are just wishing and hoping that they will be lucky enough to get by and so they talk themselves into believing that everything will be okay.

Rather than relying on luck, why not consider having an independent, third party audit of the key and critical areas of your firm's quality system and compliance practices to know for sure what risk you and your company may be facing.  In the famous scene from a Dirty Harry movie, Harry has a guy, beaten and bloodied, down on the ground, pointing that big 44 caliber Magnum at him and Harry says... "well punk, are you feeling lucky?"  The guy, reluctantly and meekly surrenders and as Harry starts to walk away the guy calls to him, wondering if there were any more bullets left in Harry's gun and says ... "I have to know!"  You too have to know; you have to know your overall business and compliance risk.  The question is will you wait until it is too late, when your are beaten and down on the ground,  to find out if you are at risk?

Call me at 239.394.9911 or on my cell at 954.236.1287 to see how QSE can help you to determine what quality system or compliance risk you or your company may have and how we can assist you in making the necessary improvements to reduce that risk.