Defibrillator maker pulls plug

Boston Scientific Corp. stopped shipping its entire line of heart defibrillators and recalled all inventory of the heart-shocking device from hospital shelves in the United States -- an unusual move announced Monday that is apparently related to a paperwork error, and not for safety reasons.

Product recalls are common in medical technology, but the sheer sweep of Boston Scientific's pullback of one its most-lucrative products surprised many who follow the industry.

The Natick, Mass.-based company said two changes made in the manufacturing process were not first submitted to the Food and Drug Administration (FDA), the government agency that regulates medical devices.

The news comes out of Boston Scientific's biggest business unit, formerly Guidant Corp., which accounts for $1.8 billion in annual sales of implantable cardioverter defibrillators (ICDs) or about 22 percent of Boston Scientific's annual sales. ICDs are implanted in the chest and shock the heart when an irregular heartbeat is detected. Based in Arden Hills, the division employs about 2,000 people here.

Product families named in the advisory include Cognis, Confient, Livian, Prizm, Renewal, Teligen and Vitality, all of which were manufactured since March 2009. The recall encompasses cardiac resynchronization therapy defibrillators, but not pacemakers. The company did not say when the recall will be lifted, or how many devices are involved.

"We are acting voluntarily and expeditiously to resolve this situation, and we have seen no evidence of any risk to patient safety," Boston Scientific Chief Executive Ray Elliott said in a prepared statement.

The advisory doesn't affect patients who are implanted with the often-lifesaving device, and the company said it does not recommend removal of the device.

The advisory hit as hundreds of cardiologists gathered in Atlanta for the American College of Cardiology's annual scientific session -- considered a premier medical meeting in the field -- prompting a variety of reaction from specialists who treat patients with the device.

"My goodness, to suddenly stop selling all these devices based on not dotting the 'i' or crossing the 't,' I think is an overreaction, if indeed that is the reason," Dr. Douglas Zipes of Indiana University Medical Center told Dow Jones.

Analysts said the short-term hit to Boston Scientific may be brief, but the long-term reputational challenge for the company may prove more daunting to fix.

"Regardless of the duration of the ICD hold, the announcement will weaken quality perception of a company that was on the brink of recovery," wrote Morgan Stanley analyst David Lewis in a note to investors.

Tough acquisition

However, the U.S. Department of Justice last month charged Boston Scientific with concealing critical information from the FDA regarding failures of several models of ICDs. The company agreed to pay $296 million on behalf of Guidant to settle the charges.

In addition, Boston Scientific recently announced up to 1,300 job cuts worldwide, including reductions as its local operations in Arden Hills and Maple Grove consolidate into one division.

"This announcement is not too damaging to the industry, but potentially damaging to the company," said Tim Nelson, an analyst at FAF Advisors in Minneapolis.

But other experts say the company should be applauded for taking such bold action.

"These companies are not trying to cut corners, their quality systems are very robust," said Mark DuVal, a Minneapolis attorney who specializes in FDA issues. "Good companies look at their quality systems very closely and take these issues very seriously."

Meanwhile, Boston Scientific's competitors have stepped up to fill any void in the market that may result from the recall. Industry leader Medtronic said its first concern about the "sudden lack of product supply" was the impact on patients.

"Medtronic will do everything we can, including working with Boston Scientific and others, to ensure the needs of patients are met during this time," spokesman Christopher Garland said.

Likewise, St. Jude spokeswoman Angela Craig said the company has "ample ICD inventory and service personnel available to assist in ensuring that patients continue to have access to the therapy."

Boston Scientific said it is working closely with the FDA to resolve the situation "as soon as possible," but acknowledged the advisory may have a material impact on revenue, operating profit and cash flow for the first quarter and full-year of 2010. An FDA spokeswoman could not be reached for comment.