158 Engineering Ethics: An Industrial Perspective
these MDRs were 12 deaths and 57 conversions to traditional surgical
repair. EVT also disclosed that it had failed to seek prior approval to
amend its instructions for use to include the handle breaking technique
as legally required (Plea, 2003). After revising physician instructions for
troubleshooting in a PMA supplement, EVT was allowed to remarket the
Ancure device in August 2001 (Jacobs, 2003).
SETTLEMENT
After 3 years of criminal investigation, the U.S. Attorney charged
Guidant with 10 federal felonies. On June 12, 2003, Guidant pled guilty and
agreed to a criminal fine of $32.5 million for these 10 felony violations.
It also agreed to forfeit $10.9 million to compensate for profit made from
illegal sales. Further, Guidant agreed to pay a civil settlement of $49 million
(Plea, 2003) to settle claims that the firm’s actions caused the Medicare,
Medicaid, and Veteran Affairs programs to pay millions of dollars for the
adulterated and misbranded devices (U.S. Attorney, 2003). As of March
2004, this total settlement of $92.4 million is the largest pay-out to date ever
levied for violating FDA’s medical device reporting requirements.
Guidant stopped manufacturing the Ancure device and closed its EVT
facility in 2003 (Jacobs, 2003).
APPLICABLE REGULATIONS
The United States Attorney charged Guidant with 10 felony counts
against the United States Code (U.S.C.):
1. Guidant was charged with one count against 18U.S.C.§1001, false
statement within the jurisdiction of a federal agency, because it did
not provide a full list of jacket retraction complaints to an FDA
investigator when requested (Criminal, 2003):
Title 18 Crimes and Criminal Procedure
Sec. 1001. Statements or entries generally
(a) Except as otherwise provided in this section, whoever, in any
matter within the jurisdiction of the executive, legislative, or
judicial branch of the Government of the United States,
knowingly and willfully
(1) falsifies, conceals, or covers up by any trick, scheme, or
device a material fact;
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2003: Guidant Ancure Endograft System 159
(2) makes any materially false, fictitious, or fraudulent statement
or representation; or
(3) makes or uses any false writing or document knowing the
same to contain any materially false, fictitious, or fraudulent
statement or entry;
shall be fined under this title or imprisoned not more than
5 years, or both.
(b) Subsection (a) does not apply to a party to a judicial
proceeding, or that party’s counsel, for statements,
representations, writings or documents submitted by
such party or counsel to a judge or magistrate in that
proceeding.
(c) With respect to any matter within the jurisdiction of the
legislative branch, subsection (a) shall apply only to
(1) administrative matters, including a claim for payment, a
matter related to the procurement of property or services,
personnel or employment practices, or support services, or a
document required by law, rule, or regulation to be
submitted to the Congress or any office or officer within the
legislative branch; or
(2) any investigation or review, conducted pursuant to the
authority of any committee, subcommittee, commission or
office of the Congress, consistent with applicable rules of
the House or Senate. (USC, 2004)
2. Guidant was also charged with nine counts against 21U.S.C.§331(a)
& §333(a)(2), interstate shipment of misbranded devices, because
shipped devices were misbranded when MDRs were not filed
within 30 days of malfunction and because updated, approved
instructions for use were not included (Plea, 2003; U.S. Attorney,
2003):
Title 21 Food and Drugs
Sec. 331. Prohibited acts
The following acts and the causing thereof are prohibited:
(a) The introduction or delivery for introduction into interstate
commerce of any food, drug, device, or cosmetic that is
adulterated or misbranded.
Sec. 333. Penalties
(a) Violation of section 331 of this title; second violation; intent to
defraud or mislead
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