CDU

The implantable cardioverter defibrillator (ICD) sector of the cardiovascular device market took some heavy fire from the media last month following the recall by Guidant (Indianapolis) of 50,000 ICDs and charges that the company had delayed a general notification concerning problems with the devices for nearly three years. The company termed the problem "a design flaw that could cause the units to short circuit and malfunction." It said that at least two patients with defibrillators made by the company had died, and the company reported that, all told, these devices had failed at least 45 times. The FDA issued its own statement on the recall, advising patients to consult with their doctors about the devices, especially those who had received a defibrillator shock.

Shortly after Guidant's recall announcement, St. Jude Medical (St. Paul, Minnesota) issued its own "notification" to physicians concerning the need for a software upgrade for certain of its ICD products, though the problem did not force a recall. The effect of the announcements was to push the ICD sector, and the implantable device market in general, under a very bright spotlight and prompt loud calls for closer scrutiny and faster, more widespread reporting of flaws that may injure patients. In a broader perspective, the issue appeared to parallel the recent spate of pharmaceutical recalls and re-labelings by the FDA.

Beyond the need for clearer guidelines for public notification, the worst-case scenario for Guidant may be the liability issues that may jeopardize its proposed merger with Johnson & Johnson (J&J; New Brunswick, New Jersey) or, at the least, put in doubt the $24 billion-plus value of that sought-after consolidation with the healthcare products giant. Besides creating a large dollar loss for Guidant, allegations that the company delayed a general notice to physicians concerning problems with the ICDs' batteries may pile on large additional costs in terms of litigation and consumption of management time.

After Guidant's disclosure of problems with the defibrillators in June a disclosure apparently forced by an expose-type article in The New York Times J&J issued a terse statement saying that it continued to be "confident" in its plans to buy Guidant. But following the first announcement that the defibrillators would be recalled, J&J issued another short statement with somewhat stronger wording. While saying it continued to work to close the acquisition in the third quarter, it called "the events" disclosed by Guidant "serious matters" and that it was "engaged in discussions with Guidant to help the company understand the issues."

Shortly after its recall announcement, Guidant said it would establish an independent panel of experts tasked with defining the circumstances for reporting problems concerning risky implanted devices. "The health and well-being of patients is our highest priority," said President and CEO Ron Dollens in a statement. "We believe that the industry and the public have the opportunity to learn from the experience that Guidant and its physicians and patients have been through."

Other voices also made haste to call for guidance concerning closer tracking of high-risk medical devices and guidelines concerning when to issue notifications and warnings concerning adverse events or recalls. Even before Guidant's announcement concerning creation of its study panel, the Heart Rhythm Society (Washington) said it would seek to establish such a group. And the Advanced Medical Technology Association (Advamed; Washington) then issued a statement saying that it "will lead the device industry in developing responsible and effective proposals that respond to current concerns. Development of the best possible policy must involve the broadest possible input, including participation by the FDA, industry, physicians, and patients." And it said it was "discussing" with the Heart Rhythm Society the development of a "summit conference," slated for September, "to surround the specific issues surrounding heart rhythm devices."

Worse news then followed, with the ICD issue appearing to be an event with wider repercussions concerning the need for broader reporting. After the first recall related to the battery problem, Guidant then issued a second notice on June 24 saying that it had determined that a group of devices in its Renewal line are "subject to a component failure that may limit available therapy." It said that it while it was still in the "early stages" of evaluating the problem, it had notified the FDA and that the FDA might "classify this action as a recall."

The company described this difficulty as a "magnetic switch [that] may become stuck in the closed position, which in some cases inhibits the device's ability to treat ventricular or atrial tachyarrhythmias and can accelerate battery depletion." It reported four "occurrences" in which "audible device tones" had signaled to physicians or patients that the magnetic switch was closed and resulted in device replacement. The four occurrences, it said, occurred in about 46,0000 devices and that a "fifth occurrence is suspected but cannot be confirmed." No deaths were reported concerning these problems, or at least not mentioned by the company

Guidant's first recall was for its Ventak Prizm 2 DR model ICD. About 17,000 people 13,900 of them in the U.S. are implanted with the affected Ventak Prizm 2 DR devices, made before April 2002, when the company said it fixed the problem. Patients with the Contak Renewal and Renewal 2 also are affected. It committed to replacing all three models at no charge because of the short-circuit problem. More than 20,000 of those models have been implanted in the U.S.

Also recalled are the Ventak Prizm AVT; Vitality AVT; Renewal 3 AVT; and Renewal 4 AVT ICDs. But Guidant said those models can be reprogrammed at a doctor's office without being removed to fix a potential computer memory error. Some 18,000 of those are used by U.S. patients. Overall, the company said about 63,000 of the devices had been implanted, with nearly 50,000 still in use. The devices cost from $20,000 to $35,000 each.

Alexander Arrow of Lazard Capital Markets (New York) issued a research note, estimating that the recall would cost the company as much as $225 million. Lawsuits adding to these payouts seem likely to follow, with at least one such suit immediately filed by a patient saying that he was implanted with one of the older, flawed ICDs though the newer, "fixed" version was available. Many others implanted are likely to charge that they experienced high levels of distress due to the dilemma poised by the faulty devices: the risks of a failed defibrillator on the one hand and the problems associated with risky surgery on the other.

In his report, Arrow downgraded Guidant to "hold" from "sell" and said that "the degree of reputational damage to the company's ICD franchise, the crown jewel of the company and the main asset J&J sought in its decision to acquire Guidant, may be becoming great enough to induce J&J to renegotiate its acquisition price."

Guidant's problems appeared to prompt action by St. Jude Medical, coming so quickly after Guidant's revelations. St. Jude said that it notified physicians that certain of its devices required a non-invasive, 45-second software upgrade to correct two anomalies found during "routine product evaluation." The company said the anomalies do not pose a "significant risk" to patients and that so far, it has not received any reports of patient adverse events or clinical complications as a result of the anomalies. A programmer is a special tabletop computer that enables a physician to communicate non-invasively with a patient's implanted device. A telemetry wand is placed on the patient's chest and the programmer will automatically detect the affected ICDs and download the new software to the device. It recommended this be done at the patient's next routine follow-up visit or at the physician's discretion.

St. Jude said it discovered during a recent examination of a single returned device that it could be possible when a device's battery voltage is past mid-life and approaching its elective replacement indicator (ERI), for a charging cycle to be skipped as the device attempts to deliver multiple shocks in rapid succession. If this were to occur, the first shock would always be delivered by the device as programmed. A subsequent shock in the sequence could be delivered after a two- to four-second delay, but the anomaly could cause the device to have fewer than the maximum total of six therapeutic shocks available for a single diagnosed episode as called for in the product's labeling. There have been no reports of any patient adverse events or clinical complications at this time, the company said.

The second anomaly in some devices is an electrical "noise" generated as a result of the charging of the device's high-voltage capacitors (tracked back to a component supplied by one vendor). The noise in the capacitor can be interpreted by the device's sensors as activity if programmed on, causing a temporary increase in the pacing rate. Again, St. Jude said each of the devices has a safe maximum pacing rate set by the patient's physician, and the company said it has not received any reports of patient adverse events or clinical complications.

"As a member of St. Jude Medical's advisory group reviewing these issues, I am confident that the company has taken the appropriate proactive steps in resolving the anomalies in the best interest of patients," said Bruce Wilkoff, MD, director of cardiac pacing and tachyarrhythmia devices at the Cleveland Clinic Heart Center (Cleveland). There are about 39,000 Epic and Atlas devices implanted worldwide that are subject to one or the other software upgrade, according to St. Jude.

St. Jude Medical said it did not expect the advisory to have any "material" financial impact on the company.

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