Boston Scientific (Natick, Massachusetts) reported that three of its subsidiaries, Guidant (Indianapolis), Cardiac Pacemakers and Guidant Sales — collectively now known as Boston Scientific Cardiac Rhythm Management — have reached an agreement with the Attorneys General of 35 states and the District of Columbia to settle investigations associated with Guidant’s Ventak Prizm 2DR Model 1861, Contak Renewal Model H135 and Contak Renewal 2 Model H155 devices. Boston Scientific acquired these Guidant entities last year with its $27.2 billion purchase of that company.

The three Boston Scientific subsidiaries will pay a total of $16.75 million and admit no liability. They also agreed to extend the supplemental warranty program for these devices an additional six months and reaffirmed their commitment to implement changes recommended by the independent panel commissioned by Guidant in 2005. Those changes include the development of a patient safety officer position and a patient safety advisory board, and making enhancements to product performance communications.

“Boston Scientific has been working cooperatively with the state attorneys general and is pleased to have reached an amicable agreement,” said Jim Tobin, president/CEO of Boston Scientific. “This agreement underscores our commitment to being the industry leader in patient safety and in communicating with patients and doctors.”

Missouri Attorney General Jay Nixon reported that Guidant will provide a warranty program to patients wanting their defibrillators replaced at no cost and will reimburse them as much as $2,500 for out-of-pocket expenses.

Nixon said the company did not disclose that it continued to sell the potentially faulty devices until 2005, two to three years after they hit the market.

Nixon noted that Missouri will receive about $390,000 from the settlement.

Since June 2005, Guidant has issued safety warnings or recalled more than 88,000 defibrillators and has recalled or issued warnings on about 200,000 pacemakers.

This latest settlement appears to be part of a trend by the company to settle in order to avoid protracted litigation and the potential for both additional expense and more negative publicity.

Last month the company reported that it will pay $195 million to settle the consolidation of around 4,000 claims involving Guidant’s implantable rhythm management devices (Medical Device Daily, July 17, 2007).

The problems leading to the litany of legal action against Guidant/Boston Sci were first revealed in 2005 with the FDA’s recall of 11 models of Guidant ICDs with electrical flaws.

The company may have made a troubling situation worse by attempting to address these problems by categorizing them, not as recalls, but “physician communications.”

On May 23, 2005, the company sent out that type of communication regarding the VEntak Prizm 2 DR defibrillator model manufactured before November 2002, advising physicians concerning what it called “a rare failure that results in the device’s inability to delivery therapy.”

Following, on June 17, the company issued another “voluntary” worldwide communication to physicians notifying them of important safety information, designed to limit the number of adverse events associated with six additional models of defibrillators.

Then on June 25, Guidant sent letters to physicians worldwide regarding defects with four more defibrillator models.

A major allegation in the liability lawsuits is that Guidant continued to ship and sell the heart rhythm devices even after learning that there were possible defects.

In other legalities: Another in a growing list of class action lawsuits has been filed in the U.S. District Court for the Central District of California against Advanced Medical Optics (Santa Ana, California) related to its Complete MoisturePlus contact lens solution.

The complaint, filed by the Oklahoma City law firm of Federman & Sherwood, alleges violations of federal securities laws, including allegations that the company issued a series of material misrepresentations to the market which had the effect of artificially inflating the market price. The class period is from Jan. 4, 2007, through May 25, 2007.

The company has already been the subject of several other class action lawsuits related to the Complete MoisturePlus contact lens solution.

Earlier this week, Lerach Coughlin Stoia Geller Rudman & Robbins, a San Diego firm filed a class action against the company (MDD, Aug. 28, 2007).

That complaint that in November 2006 the company had reported a voluntary recall of certain eye care product lots and the related manufacturing capacity constraints caused by a production-line issue at its manufacturing plant in China (MDD, Nov. 22, 2006). By Jan. 4, according to the complaint, the company had “successfully convinced the market that problems with Complete were in the past.” Then, on May 25, after the market closed, AMO reported the voluntary recall of Complete as a precaution because of reports linking it to a rare, and serious, eye infection, Acanthamoeba keratitis (AK), caused by a parasite. The link between the solution and the infection was identified as a result of an investigation by the Centers for Disease Control and Prevention (Atlanta) (MDD, May 30, 2007). Following this news, AMO stock collapsed, dropping $5.51 a share on volume of 16.2 million shares, according to the complaint.

AK is a microorganism commonly found in water, soil, sewage systems, cooling towers, and heating/ventilation/air conditioning systems. AK is usually found among individuals who improperly store/handle/disinfect their lenses (e.g., use tap water or homemade solutions for cleaning), swim/use hot tubs/shower while wearing lenses, come in contact with contaminated water, have minor damage to their corneas, or have previous corneal trauma.

AMO was already facing a class action lawsuit related to its Complete MoisturePlus contact lens solution on behalf of California consumers who bought the product but have not alleged physical injuries (MDD, June 12, 2007). That lawsuit seeks reimbursement of money consumers spent to buy the contact lens solution, as well as the cost of replacing potentially contaminated contact lenses and lens cases as a result of the FDA’s recommendation that these products also be discarded by anyone who has used them in conjunction with Complete MoisturePlus.