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Guidant Sued Over Handling of Aortic Graft

Jun 14, 2003 | AP

Medical device manufacturer Guidant Corp. was hit with a lawsuit a day after one of its subsidiaries pleaded guilty to criminal charges for covering up problems with one of its products.

The lawsuit, filed Friday in federal court in Indianapolis, accuses Guidant of "material misrepresentations to the market" in the handling of the Ancure aortic abdominal graft.

Attorneys for the plaintiff are seeking class-action status for the suit and asking people who have held Guidant stock between August 2001 and this week to join in.

Guidant subsidiary Endovascular Technologies Inc. on Thursday admitted covering up problems with the Ancure "stent-graft" device that may have led to 12 deaths during aneurysm treatments. The company pleaded guilty to 10 felony charges, including shipping misbranded products and making false statements to government regulators.

Analysts later warned that Guidant, based in Indianapolis, could become vulnerable to more litigation and stiffer regulatory scrutiny of new products.

The Justice Department (news - web sites) has said it is considering filing charges against company executives.

The graft, one of a half-dozen competing devices on the market, is inserted into the aorta to shore up dangerously weakened spots in the artery wall.

The criminal complaint against Endovascular alleged the company misled federal regulators and reported only 172 malfunctions. Prosecutors said Endovascular had records of 2,628 malfunctions, including reports that the incidents may have led to 12 deaths and 57 surgeries to remove the device.

The company said the problems were resolved after the device was voluntarily recalled in March 2001 and before it was reintroduced five months later.

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