Tuesday, 28 June 2005

Princess Health and Guidant Executives Sued for Securities Fraud. Princessiccia

Princess Health and Guidant Executives Sued for Securities Fraud. Princessiccia

Those hits just keep on coming for Guidant Corp. The Indianapolis Star reported that Guidant and six of its top executives were named as defendants in a securities fraud lawsuit. The suit charges that the executives "concealed long-standing, life-threatening defects" in its products to prop up its stock price prior to the company's proposed merger with Johnson & Johnson. The suit alleges that the six executives, including Guidant Chief Executive Officer (CEO) Ronald W. Dollens, sold Guidant stock worth $39.5 million this year prior to the publication of the first news article by the NY Times about problems with Guidant's implantable cardiac defibrillators (ICDs).
Princess Health and  Guidant Executives Sued for Securities Fraud.Princessiccia

Princess Health and Guidant Executives Sued for Securities Fraud.Princessiccia

Those hits just keep on coming for Guidant Corp. The Indianapolis Star reported that Guidant and six of its top executives were named as defendants in a securities fraud lawsuit. The suit charges that the executives "concealed long-standing, life-threatening defects" in its products to prop up its stock price prior to the company's proposed merger with Johnson & Johnson. The suit alleges that the six executives, including Guidant Chief Executive Officer (CEO) Ronald W. Dollens, sold Guidant stock worth $39.5 million this year prior to the publication of the first news article by the NY Times about problems with Guidant's implantable cardiac defibrillators (ICDs).
Princess Health and Another Health Care Executive Pleads Guilty. Princessiccia

Princess Health and Another Health Care Executive Pleads Guilty. Princessiccia

The Charlotte Observer reported that David M. Hurley, the former Chief Operating Officer (COO) of aaiPharma Inc, agreed to plead guilty of conspiring to commit fraud. In 2003, federal prosecutors charged that Hurley made false ledger entries to overstate sales reports, revenues and earnings. In May, aaiPharma filed for bankruptcy.
An accompanying report noted that investigators are getting busier and busier with health fraud cases. In North Carolina, recoveries from health care fraud went from $2.2 million in 2000, to $18.3 million in 2004, and so far in 2005, the figure is $28 million. The reporter noted, "experts say health care fraud accounts for only a small portion of total health-care spending, but the truth is we don't know how much fraud is taking place."
Readers of Health Care Renewal may conclude that more broadly, conflicts of interest and corruption may add considerably to health care spending, while decreasing access, degrading quality, and demoralizing health care professionals.
Princess Health and  Another Health Care Executive Pleads Guilty.Princessiccia

Princess Health and Another Health Care Executive Pleads Guilty.Princessiccia

The Charlotte Observer reported that David M. Hurley, the former Chief Operating Officer (COO) of aaiPharma Inc, agreed to plead guilty of conspiring to commit fraud. In 2003, federal prosecutors charged that Hurley made false ledger entries to overstate sales reports, revenues and earnings. In May, aaiPharma filed for bankruptcy.
An accompanying report noted that investigators are getting busier and busier with health fraud cases. In North Carolina, recoveries from health care fraud went from $2.2 million in 2000, to $18.3 million in 2004, and so far in 2005, the figure is $28 million. The reporter noted, "experts say health care fraud accounts for only a small portion of total health-care spending, but the truth is we don't know how much fraud is taking place."
Readers of Health Care Renewal may conclude that more broadly, conflicts of interest and corruption may add considerably to health care spending, while decreasing access, degrading quality, and demoralizing health care professionals.

Sunday, 26 June 2005

Princess Health and Now Stuck Switches for Guidant. Princessiccia

Princess Health and Now Stuck Switches for Guidant. Princessiccia

The NY Times reported yet another problem with implantable cardiac defibrillators (ICDs) made by Guidant. This time it was a magnetic switch that could become stuck in the "off" position. Apparently, this flaw is not so serious as previous ones (see most recent post here), because it can be fixed without removing the devices. A Guidant consultant suggested that the problem affects about 6000 devices. The models affected were the Contak Renewal 3, Contak Renewal 4, Contak Renewal 3 AVT, Contak Renewal 4 AVT, and Renewal RF. The company "urged doctors ... to stop implanting" the device, but "did not say how it planned to fix the problem, when it expected to do so, or how it would fix units already implanted in patients," according to the Times. Also, "Guidant declined a request to interview its chief executive, Ronald W. Dollens."
Again, one would have hoped that the company could have done better with quality control, given that each of these devices cost about $25,000.
Princess Health and  Now Stuck Switches for Guidant.Princessiccia

Princess Health and Now Stuck Switches for Guidant.Princessiccia

The NY Times reported yet another problem with implantable cardiac defibrillators (ICDs) made by Guidant. This time it was a magnetic switch that could become stuck in the "off" position. Apparently, this flaw is not so serious as previous ones (see most recent post here), because it can be fixed without removing the devices. A Guidant consultant suggested that the problem affects about 6000 devices. The models affected were the Contak Renewal 3, Contak Renewal 4, Contak Renewal 3 AVT, Contak Renewal 4 AVT, and Renewal RF. The company "urged doctors ... to stop implanting" the device, but "did not say how it planned to fix the problem, when it expected to do so, or how it would fix units already implanted in patients," according to the Times. Also, "Guidant declined a request to interview its chief executive, Ronald W. Dollens."
Again, one would have hoped that the company could have done better with quality control, given that each of these devices cost about $25,000.
Princess Health and Boston Scientific Settles Case of Defective Stent Systems. Princessiccia

Princess Health and Boston Scientific Settles Case of Defective Stent Systems. Princessiccia

The Boston Globe reported that Boston Scientific has settled a suit brought by the US Department of Justice that alleged "a failure by Boston Scientific to take the most appropriate steps in a timely manner to ensure that the devices it was distributing to hospitals nationwide performed properly," per US Attorney Michael J. Sullivan.
Boston Scientific began shipping Nir coronary artery stent systems on August 12, 1998. Coronary artery stents are small devices, often shaped like springs, or wire mesh cylinders, used to hold coronary arteries open. According to the Globe, within five days, Boston Scientific got reports that the balloons attached to the stent catheters were failing when inflated to pressures lower than they were designed to handle. In a September 12, 1998 conference with US Food and Drug Administration (FDA) officials, one said that the FDA was "very uncomfortable" with continuing stent shipments." However, Boston Scientific continued shipping the stents until October 5, 1998, and then began a voluntary recall. The FDA finally received 25 complaints that injuries were caused by failed stent balloons.
The settlement called for Boston Scientific to pay $74 million. Department of Justice officials chose that amount since it significantly exceeded the $61 million revenue the company received from the 34,589 Nir stent systems it sold (i.e., $1764 per system.)
This case, which took almost seven years to resolve, could be compared with the recent case of problems with Guidant implantable coronary defibrillators (ICDs). (See most recent of many posts on Guidant here.) In both cases, the companies appeared to delay notification of device defects, leading to more potentially defective devices to be shipped and implanted in patients. In both cases, the devices seem relatively expensive compared to the complexity of their engineering and manufacturing. (For example, the stents mentioned above are again simple metal devices shaped link springs or mesh cylinders, and the accompanying system consists mainly of a plastic catheter with an inflatable balloon at its tip, sold for, as noted above, more than $1700.) Given how much money the companies charge for these devices, one would think they would be able to afford exemplary quality control, and a system to rapidly notify physicians who implant the devices of any potential problems.