Here's the story, edited and re-sequenced a bit,
This story reminds us of some important points. The profit margins for the manufacture of medical devices are huge. Large corporations not usually identified as health care corporations, like General Electric, play important roles in the huge and complex health care system, such as manufacturing medical devices. Such corporations are not immune to the problems that now plague "pure" health care organizations. In the current case, there were allegations of mis-handled safety inspections, and "upper management's" unwillingness to deal with safety problems in one of the company's new "transformational technologies." Finally, although patient safety problems are most often attributed to errors by health care professionals, they can also result from mismanagement within health care organizations.
General Electric bought OEC Medical Systems in 1999. It is part of the $15 billion GE Healthcare division with some 70 facilities worldwide. Since that time, OEC revenue more than doubled to some $500 million annually. Profit margins have soared to 50 percent, meaning the company clears about $250 million a year. The company has a dominant 70 percent market share.
The FDA issued GE OEC Medical Systems, 384 Wright Brothers Drive, a warning letter in March 2005 after an audit revealed serious quality control lapses in manufacturing, packing, storage and installation of its equipment.
For example, the inspection showed that test technicians for more than a year photocopied results from one device to another rather than create new documents for each device. It also revealed failure to timely report equipment malfunctions 'likely to cause or contribute to a death or injury if the malfunction were to recur.'
A follow-up audit last August showed the company still wasn't in compliance with FDA quality-assurance requirements.
Upper management had ignored internal pleas for money and personnel to correct the deficiencies identified in the FDA audits, sources told the Deseret Morning News.
GE OEC Medical Systems ceased shipping its fluoroscopic X-ray and navigation systems last September after audits revealed numerous violations of federal quality assurance regulations. About 30 employees went on furlough.
On Friday, the FDA announced a consent decree with the company, a subsidiary of global giant General Electric, prohibiting it from making and distributing the equipment until it complies with federal law. GE OEC Medical Systems is part of the GE Healthcare division. The decree, which serves as a permanent injunction, was filed in U.S. District Court for Utah.
In a statement, Pete McCabe, president and CEO, Surgery, GE OEC Medical Systems, said the company is committed to making safe products and following FDA rules.
'Patient safety and quality continue to be our top priorities,' he said in a company statement.