As part of the deal to settle the charges in that case, Guidant entered into a corporate integrity agreement with the Department of Health and Human Services, and agreed to comply with all regulations and reporting requirements of the FDA, and health care programs like Medicare. Guidant obviously did not live up to that agreement.
Shortly after the first recall, on June 24, 2005, Guidant warned doctors to stop implanting another group of its most advanced defibrillators because of a flaw that could cause a magnetic switch to become stuck in the off position, and lead to some of the approximately 40,000 units already implanted to not work properly.
"The move," the June 25, 2005 New York Times said at the time, "could have significant financial consequences for Guidant because it affects, for now, sales of many of the company's heart devices in the fastest-growing part of the market: advanced defibrillators that also act as pacemakers for both sides of the heart."
The warning included the Contak Renewal 3; Contak Renewal 4; Contak Renewal 3 and 4 AVT; and the Renewal RF. At the time, Guidant said it had received 4 reports of flawed switches among the 40,000 devices implanted.
Defibrillator sales, the Times reported, accounted for nearly 50% of Guidant's revenue of $3.8 billion and that analysts thought the types of models involved, known as cardiac resynchronization therapy, or CRT, devices, made up 40% to 50% of its defibrillator sales.
"The use of such devices," the Times said, "is growing rapidly in part because Medicare has greatly increased the number of older patients for whom it will pay for such devices."
A little over a month later, on July 18, 2005, Guidant informed doctors that replacements might be needed for 9 pacemaker models manufactured between 1997 and 2000, with some 28,000 implanted in patients worldwide. Due to failures, several patients with the implants had lost consciousness or developed possible heart failure, Guidant stated, and that one patient may have died.
Two months later, on September 22, 2005, Guidant issued a recall for some of its Insignia and Nexus pacemakers because of failures, including nine cases requiring emergency hospitalization. As of September 6, 2005, the company said, 36 out of 49,500 devices experienced loss of pacing output, while 16 out of 341,000 pacemakers suffered a telemetry failure.
Less than a month later, on October 13, 2005, the FDA issued an update about malfunctions occurring with the following defibrillators:
VENTAK PRIZM ® 2 DR, Model 1861, manufactured on or before April 16, 2002
CONTAK RENEWAL ®, Model H135, manufactured on or before August 26, 2004
CONTAK RENEWAL ® 2, Model H155, manufactured on or before August 26, 2004.
The FDA said it was providing the update because Guidant had informed the agency that six additional clinical occurrences of failures had been reported since July 14, 2005, for a total of 21 failures, including 3 patient deaths, as of October 7, 2005.
On January 23, 2006, Guidant issued another warning to doctors about a problem with a batch of its older model pacemakers, and said, 19,200 patients were believed to be still using the devices manufactured between October 1998 and December 2000.
These devices carried a risk of a seal degradation, the company advised, that could allow moisture to seep inside the case and can pose "serious health consequences" for the user.
Less than a month later, on February 22, 2006, the Associated Press reported that Frederick McCoy Jr, the head of Guidant's cardiac device unit, acknowledged in a deposition that the company made changes to one of its defibrillators in 2002, and incorrectly told federal regulators it had no effect on the product's performance.
In the deposition, Mr McCoy said, Guidant made two repairs to the pacemaker in 2002, to keep it from short circuiting and that neither modification was approved by the FDA, and that only one repair was disclosed in an annual report.