CDU Associate

One day after Boston Scientific (Natick, Massachusetts) emerged victorious in its bid to acquire Guidant (Indianapolis) for about $27.2 billion, the FDA warned it of company-wide quality failures that could possibly hold up future product approvals.

During a Jan. 26 conference call on the warning letter, one FDA official noted that this was only the third such corporate-wide warning letter ever issued to a medical device company.

The FDA cited the company’s management for not properly tracking complaints over certain products, including its wildly popular Taxus stent, as well as Vaxcel catheters, Leveen needle electrodes and the Enteryx device used in surgery to treat acid reflux.

Boston Sci also failed to notify the FDA about such complaints, the agency said, citing three company facilities.

“The problems identified in this [warning] letter we consider to be quite serious and . . . involve the entire corporate structure,” Daniel Schultz, MD, head of the FDA’s Center for Devices and Radiological Health (CDRH), told reporters during the conference call.

Underlying the serious nature of the warning letter, Tim Ulatowski, director of the office of compliance at CDRH, noted that it was only the third such corporate-wide warning letter ever issued to a medical company. He said the other two device companies that have been cited since quality system regulations were first implemented at CDRH in 1997 were Gambro (Stockholm, Sweden) in 2001 and Johnson & Johnson (New Brunswick, New Jersey) subsidiary Cordis (Miami Lakes, Florida) in 2004.

“These violations are corporate-wide,” said Ulatowski, “addressing potentially all manufacturing sites and all facilities of Boston Scientific.”

FDA officials said they did not intentionally withhold the letter until after the company sealed its purchase of Guidant, which also is facing an agency warning over its heart devices first reported in December.

One official at the agency said the timing of the warning letter was “serendipitous,” and followed a routine course of action in relation to the company’s most recent plant inspections, which occurred at the Natick, Massachusetts; Maple Grove, Minnesota; and Spencer, Indiana, facilities in July and August of last year.

The FDA also said the company’s efforts to fix problems at three other sites cited in previous agency warnings were inadequate.

On a more positive note, the company also reported a second communication from the FDA that advised it that an FDA inspection reviewing the manufacture of the Taxus paclitaxel-eluting coronary stent system, Liberté coronary stent system and Carotid Wallstent system at the company’s Galway, Ireland, manufacturing facility concluded with no observations reported.

“Although we are pleased with the result of the inspection of our largest plant [the Galway facility], we clearly have not done enough to resolve the issues raised by the FDA last year,” Jim Tobin, Boston Sci’s president and CEO, said in a statement. “We are confident we have addressed many of these issues, but others have not yet been fully resolved. We will work closely with the FDA to resolve these outstanding issues, and we believe we are on track to do so promptly.”

Tobin added that “product quality and performance have always been a top priority at Boston Scientific.” And while he said he believes the company is bringing the same urgency to its overall quality and reporting management, “we still have a ways to go.”

The company, which told Cardiovascular Device Update that it would not add any comments on the warning letter other than those addressed in its press release, noted that the warning letter did not prevent distribution of its products, including its lucrative Taxus stents, and that the FDA did not plan to tell hospitals to stop using them at this time.

Both Boston Scientific and Guidant already have faced product recalls. Boston Sci voluntarily recalled nearly 100,000 Taxus stents in 2004 and since this past June, Guidant has issued recalls of more than 88,000 implantable cardioverter defibrillators and issued warnings for 28,000 pacemakers.

Morgan Stanley (New York) analyst Glenn Reicin, in a research note, said this latest warning should not be taken lightly. “The FDA-issued warning letter to Boston Scientific will put pressure on the stock and raise concerns about the company’s ability to compete,” he said.

Others were less concerned, noting that the warning letter fell short of a recall. “In our opinion this news is not new and should not slow down the merger with Guidant,” wrote Harris Nesbitt (New York) analyst Joanne Wuensch.

The FDA said it might not approve applications for new devices and could refuse to certify that the company was meeting agency standards if other countries sought an opinion.

“If there are applications that cannot be processed . . . without first resolving the issues described in the warning letter, those applications will be put on hold,” Schultz said. He urged Boston Scientific to make broad changes “on a company-wide basis.”

“We will look at each certification individually in relation to the warning letter,” added Murray Lumpkin, deputy commissioner for international activities and strategic initiatives.

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