Boston Scientific Faces $5 Million-a-Day Paperwork Problem - Health Blog - WSJ

By Ron Winslow

Boston Scientific is back in the regulatory doghouse after the medical-device maker failed to report to the FDA changes in how it manufactures its line of implantable heart defibrillators

The company has recalled the devices and halted further shipments until it resolves the reporting issue with the FDA. The business accounts for 15% of its revenue, which totaled $8.19 billion in 2009. Sanford Bernstein analyst Derrick Sung, tells the WSJ’s Jonathan Rockoff the sales suspension will cost the company $5 million a day.

In addition to the financial hit, the news is another black-eye for the Natick, Mass., company, which has struggled with quality control and other regulatory issues over much of the past decade. In January 2006, the FDA cited Boston Scientific for “ongoing systemic” quality control problems that included manufacturing concerns about its Taxus drug-coated stent.

That was about the same time the company beat out Johnson & Johnson in a bitter takeover battle for Guidant. In addition to Guidant’s implantable heart rhythm device business, Boston Scientific acquired a host of that company’s quality issues in the deal. Among other things, the FDA refused to approve several important new products until Boston Scientific cleaned up the problems.

Recently, Boston Scientific “has been in the process of rebuilding its reputation,” Doug Zipes, a heart rhythm disorder specialist and past president of the American College of Cardiology, tells the Health Blog at the college’s annual scientific meeting in Atlanta.

Zipes says the news that the company is halting sales of all of its implantable heart rhythm devices “strikes me as an overreaction” to “what appears to be a bookkeeping error with the FDA.”

Boston Scientific says in a statement it brought the new reporting problem to the FDA’s attention and “has no inidcation that the manufacturing process changes pose any risk to patient safety.” It isn’t recommending that any patient have devices removed. The company says it is working closely with regulators “to resolve this situation as soon as possible.”

“This isn’t going to affect patient care,” Zipes says. “We have alternative devices” from Boston Scientific rivals such as Metronic and St. Jude Medical, whose stocks rose smartly today as Boston Scientific’s sank on the news. “I see this as more of a problem for Boston Scientific than for the medical community.”

via blogs.wsj.com

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