3 Ex-Magellan Officials Charged Over Device Malfunctions

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Three former top officials at Magellan Diagnostics (Billerica, MA) have been charged over their role in allegedly concealing a device malfunction that produced inaccurately low lead test results for tens of thousands of children and other patients. Former CEO Amy Winslow, former chief operating officer Hossein Maleknia, and former quality and regulatory affairs director Reba Daoust were charged 4/5 with conspiracy to commit wire fraud; wire fraud; conspiracy to defraud an FDA; and introduction of misbranded medical devices into interstate commerce with intent to defraud and mislead, according to a Justice Department release. 

The case involves Magellan’s LeadCare Ultra, LeadCare II and LeadCare Plus, which are intended to detect lead levels and lead poisoning in the blood of children and adults using either venous (i.e., blood draws through the arm) or fingerstick samples. According to the indictment, the former officials “repeatedly misled Magellan customers and the FDA about a serious malfunction that affected Magellan’s LeadCare devices when they were used to test venous blood samples. By allegedly hiding the malfunction and later deceiving customers and the FDA about when they discovered the malfunction, the nature, extent and frequency of the malfunction, and the risks associated with the malfunction, the defendants caused an estimated tens of thousands of children and other patients to receive inaccurately low lead test results.”

The government alleges that the former officials first learned that a malfunction in their devices could cause inaccurate lead test results during the FDA clearance process in 2013. “Several months after the release, LeadCare Ultra customers independently discovered the malfunction and complained about inaccurate results,” the government contends. It says the officials provided false and misleading statements to customers that they “recently identified cases” of the malfunction and they did not observe the malfunction “in our clinical trials prior to the product release.” According to court documents, they knew about the malfunction for over a year, and before the product release, and the same malfunction affected the other devices too.

Magellan was acquired by Meridian Bioscience 3/2016 and the defendants shortly afterwards notified customers and FDA about the malfunctions. “Magellan’s report to the FDA about LeadCare II allegedly made materially false and misleading statements and concealed material facts about Magellan’s discovery of the malfunction in LeadCare II,” the government says. It adds that the former officials delayed notifying FDA and then misled the agency about the malfunction. They allegedly only filed an FDA report about the malfunction after an outside consultant told Magellan that if they did not report the problem, the consultant would.

After Meridian acquired Magellan, the government alleges, Winslow received a $2 million bonus and Maleknia received a $450,000 bonus.

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