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Feds Probing Heart Device Firms

Oct 26, 2005 |
Implanting a device in a heart

Payments As A Means Of Promoting Use Of Their Products.

The Justice Department has started a broad investigation into whether makers of implantable heart devices have offered payments or other inducements to doctors or others as a means of promoting use of their products, a major manufacturer said late Tuesday.

Medtronic Inc., the nation's biggest maker of pacemakers and defibrillators, said it had received a subpoena from the U.S. attorney in Boston seeking information related to the provision of payments or other benefits to people like doctors who help decide which company's products to use.

Additionally, federal prosecutors have subpoenaed rival heart device makers St. Jude Medical Inc. and Guidant Corp., seeking documents related to implanted pacemakers and defibrillators, the companies said Tuesday.

The three medical device makers, all of which have a strong presence in the Twin Cities, said the civil subpoenas came from the U.S. attorney's office in Boston. Additionally, Guidant, in a statement, said it received a subpoena from the Minneapolis U.S. attorney's office.

Medtronic said it was asked for documents about products such as pacemakers and compliance materials related to fraud and anti-kickback statutes, the Fridley-based company said in a statement Tuesday. Little Canada-based St. Jude, ranked No. 3, said it was subpoenaed for documents on general industry practices since January 2000, according to a U.S. Securities and Exchange Commission filing earlier Tuesday.

Subpoena Requests Documents Relating To The Company's Ventak Prizm 2 Defibrillator And Contak Renewal Pacemaker.

Guidant's release said the Minneapolis subpoena requests documents relating to the company's Ventak Prizm 2 defibrillator and Contak Renewal pacemaker. Guidant is based in Indianapolis, but it develops its heart devices in Arden Hills. Guidant, the second-largest maker of heart devices, said its subpoena from the Boston U.S. Attorney's office requested documents on pacemakers and related products.

All three companies said they would cooperate with the requests. Medtronic spokesman Rob Clark and Guidant spokesman Steven Tragash didn't return phone messages to their offices after business hours. St. Jude spokeswoman Angela Craig declined to say which documents were sought. She said the subpoena was "a broad request."

Pacemakers use a mild electrical current to speed a slow heartbeat, while defibrillators jolt hearts that have life-threatening irregular beats.

In news releases, none of the companies said what prompted the subpoena, but heart devices have come under increasing scrutiny in recent months.

Dhulsini De Zoysa, an analyst with S.G. Cowen & Co., citing company management, said last month that criminal investigators for the Food and Drug Administration questioned two former Guidant employees.

Guidant recalled some of its cardiac defibrillators June 17 because of reported failures and at least two deaths. The recall involved 50,000 devices, including a model that developed flaws the company fixed in 2002. A week later, Guidant told doctors to stop using five models with another defect. No injuries or deaths were reported in that case.

On Aug. 25, the Food and Drug Administration said it was conducting comprehensive inspections of Guidant's factories. The agency said it couldn't reveal how extensive the inspections would be or how long they may take.

Last week, Medtronic said its Endeavor drug-coated stent failed to keep heart arteries open as effectively as Johnson & Johnson's Cypher in the first head-to-head U.S. study comparing the devices.

Johnson & Johnson has signaled it may seek to reduce its December offer to buy Guidant for $25.4 billion. J&J, the world's biggest maker of medical devices, has said it's considering "alternatives."

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