Engineering Ethics

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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(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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