And then there was silence. The story of the suppressed information about the defective defibrillators became old news, as did the story of the merger between Boston Scientific and Guidant. The story vanished, nothing more happened, until last week
A lone echo from this story from what now seems long ago was heard, as reported by Bloomberg,
Boston Scientific Corp. agreed to pay $296 million to settle a U.S. Justice Department investigation into its Guidant unit’s handling of heart devices and restated third-quarter results to show a loss.
Guidant will plead to two criminal misdemeanors for failing to properly alert the U.S. Food and Drug Administration about problems with some of its implantable defibrillators, Boston Scientific said today in a statement. The probe concerned product advisories sent by Guidant before its acquisition by Boston Scientific in April 2006, the parent company said.
So even though Boston Scientific's now subsidiary Guidant will plead guilty to a crime involving suppression of information about the flaws in its defibrillators, the current CEO of Boston Scientific denied anyone did anything wrong:
'Guidant and its employees acted in good faith and believed they complied with applicable laws and regulations,' Boston Scientific Chief Executive Officer Ray Elliott said in the company’s statement. 'We elected to resolve this matter so we could put it behind us and devote our full energies and resources to developing our innovative technologies.'
I guess it's not hard to put a little matter of criminal conduct behind a big health care corporation and its leaders when the only downside of pleading guilty is a fine paid seven years after the criminal conduct occurred. Moreover, that fine that will come out of the company treasury, and its impact will thus be spread among stock-holders, employees, and customers, not targeted at those who performed, directed or approved the acts that lead to the guilty plea.
Although the Bloomberg report was more detailed than others I found, none mentioned that the information that was concealed back in the day was about the failure of an expensive device that was supposed to be life-saving, and whose failure might doom some of its recipients to an early death. Anyone reading these late 2009 articles would get a sense that Guidant personnel were guilty of some technical reporting violations, not of withholding information that supposed life-saving treatments might be useless.
As in the case of many other cases that resulted in legal settlements or guilty pleas, the company involved only needs to pay a fine, and no individual who performed, directed or approved unethical or illegal acts will suffer any negative consequences. I submit once again that such fines are viewed merely as costs of doing business by the affected companies, and do not deter future bad behavior.
In this vein, note that in 2005, Boston Scientific agreed to a $74 million settlement of charges that it knowingly sold a defective coronary artery stent system (see post here), which did not deter the company from merging with Guidant.
This case also demonstrates how the anechoic effect continues. Bad behavior by large health care organizations still gets little notice, and when it is noticed, its real clinical and human effects are discounted.
Real health care reform would address how leaders of health care organizations can continue to act with impunity even when their actions can lead to sickness, disability, and death.