A Minnesota judge is in the process of considering Boston Scientific subsidiary Guidant's guilty plea to two misdemeanors for failing to properly notify the U.S. Food and Drug Administration about what the DOJ characterizes as potentially "catastrophic" short-circuiting problems in its defibrillators.

As part of the plea, announced last year but delivered in U.S. District Court in St. Paul, Minn. on Monday, Guidant agreed to pay $296 million in combined fees, what FDA officials say is the biggest fine ever imposed on a device manufacturer for falling afoul of the Food, Drug and Cosmetic Act.

The judge, Donovan W. Frank, said he would reach his decision within three weeks.

The delay comes mainly as the court has to consider objections from attorneys representing plaintiffs - patients who had the allegedly flawed devices implanted - and who are suing the company. They worry that the plea agreement doesn't include restitution.

"We've already entered into a settlement with Guidant. They paid a very large sum of money, but it didn't make all the victims whole," Charles Zimmerman, the lead counsel for the plaintiffs, tells DOTmed News.

Reportedly, Guidant has paid out $240 million in a confidential settlement among the 8,550 plaintiffs about two years ago, with the money being distributed through last year.

Defibrillator failures

According to the government documents, in 2002 Guidant learned of a serious flaw in its Ventak Prizm 2 defibrillators, life-saving implantable devices that jolt the heart when its rhythms go awry. In August 2003, after fixing the flaw, Guidant allegedly misled the FDA by claiming the changes to devices did not affect their "safety or effectiveness."

Then in 2004, Guidant allegedly learned of similar problems with two of its Contak Renewal devices, according to court documents. That year a Spanish man died after his physician, during a computer check of the defibrillator, saw a warning on his monitor telling him to inspect the shocking lead, but with no information about the short-circuit problems. After being sent home, the man died a week later from cardiac arrest. While Guidant sent overnight packages to physicians to remedy the warning, they called them a "product update," and again allegedly failed to tell the FDA that this was actually a correction to mitigate a safety risk which, by law, Guidant was required to do within 10 days.

Later, in June 2005, Guidant issued what the FDA considered Class I recalls, the most serious, of the devices.

Previous settlements

If the judge accepts the plea, it will be the second time over the last six months that Boston Scientific has had to pay out for its subsidiary, which it acquired in 2006, well after the events in these cases. In December, Boston Scientific reached a $22 million settlement with the Department of Justice over alleged kickbacks Guidant paid to doctors in 2003 and 2004 to influence their participation in post-market surveys. Neither company admitted to any wrongdoing.

Boston Scientific did not respond to requests for comment by press time. But in November, when the plea over defibrillator reporting was first announced, Boston's CEO and president Ray Elliott, said: "Guidant and its employees acted in good faith and believed they complied with applicable laws and regulations. We elected to resolve this matter so we could put it behind us and devote our full energies and resources to developing our innovative technologies."

Bad time for Boston

The plea comes at a bad time for Boston. In March, in an unrelated case, the FDA rejected a request by the Natick, Mass.-based company to speed up a review of several of its defibrillators, which were recalled earlier in the month. According to the Wall Street Journal, Boston is losing as much as $5 million a day in sales during the recall.

In February, before the recall, the company had announced it would cut 1,300 jobs.

And ZimmermanReed, the firm representing the plaintiffs, is also involved in another lawsuit against Boston. The Minnesota-based lawyers are helping investors sue Boston for what they consider misleading claims about the TAXUS drug-eluting stent. The firm alleges some company executives withheld information to artificially boost stock prices. That case is set to be heard in a Boston district court in the coming weeks, according to Zimmerman.