Catheter maker to plead guilty, pay $61 million

October 16, 1993|By New York Times News Service

WASHINGTON -- One of the world's largest medical device manufacturers has agreed to plead guilty to more than 390 counts of fraud and human experimentation for selling untested heart catheters, Food and Drug Administration officials said yesterday. The sales resulted in at least one death and 22 emergency heart surgeries.

The settlement, under which the company, C. R. Bard Inc., is to pay $61 million, is the largest health fraud case ever handled by the FDA and the Justice Department.

Six executives were indicted separately and have not yet entered a plea. The U.S. attorney in Boston, A. John Pappalardo, said Friday that a grand jury in U.S. District Court had returned a 393-count indictment against the chairman and chief executive, George T. Maloney, and five former officials of Bard, which is based in Murray Hill, N.J., and its USCI division in two Boston suburbs, Billerica and Haverhill. The maximum penalty on the charges is 5 to 20 years in prison and a $250,000 fine on each count. Each defendant faces 200 to 300 counts.

FDA Commissioner David A. Kessler said in Washington that the company's board of directors had agreed Thursday night to plead guilty on behalf of the corporation to illegal experimentation on humans, lying to the government about the experimentation, selling devices without FDA approval and lying to the government about the failure of the devices.

The $61 million settlement will be divided in half, with one portion covering criminal fines and the other covering civil damages to the government for violations of the Food, Drug and Cosmetic Act and other laws.

The amount was estimated to be about equal to the gross sales of all the eight models of defective devices manufactured by the company.

Bard has also agreed to an array of remedial measures and is to be monitored for four years by an outside consultant who will report its progress to the FDA.

Mr. Kessler stated yesterday, "For a company to engage in a pattern of using unsuspecting patients as guinea pigs and operating rooms as laboratories for unapproved products shows a blatant disregard for the health and safety of the patients who literally entrusted their lives to the company's products."

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