Drugs

Magellan Pays $40 Million Over Faulty Devices

Medical device maker Magellan Diagnostics (Billerica, MA) has agreed to pay $40 million to resolve criminal charges relating to its concealment of a device malfunction that produced inaccurately low lead test results for potentially tens of thousands of patients. “As part of the criminal resolution, Magellan will plead guilty to violations of the federal Food, Drug and Cosmetics Act and pay a $21.8 million fine, $10.9 million in forfeiture and a minimum of $9.3 million to compensate patient victims,” a Justice Department release says. “Today’s resolution also includes a deferred prosecution agreement to resolve felony conspiracy fraud charges against the company.”

The firm’s devices – LeadCare Ultra, LeadCare II and LeadCare Plus – were intended to detect lead levels and lead poisoning in the blood of children and adults using either venous or fingerstick samples. LeadCare II was the main test of fingerstick samples conducted in the U.S. from 2013 through 2017, the government says.

In its settlement, Magellan admitted that it misled its customers and FDA about a serious malfunction that affected its LeadCare devices. “By hiding the malfunction and later deceiving customers and the FDA about when the company discovered the malfunction, the nature, extent and frequency of the malfunction, and the risks associated with the malfunction, Magellan caused an estimated tens of thousands of children and other patients to receive inaccurately low lead test results,” the government contends.

Magellan learned about the malfunction during the FDA clearance process in 6/2013, according to the Justice Department. “Several months after the release, LeadCare Ultra customers independently discovered the malfunction and complained about inaccurate results,” it says. “In response, Magellan told its customers that it had only recently identified the malfunction and had not observed the malfunction in its clinical trials prior to product release. Magellan, in fact, had known about the malfunction for over a year, including before the product release.”

When FDA inquired about the malfunctions in 2017, Megellan falsely told the agency that it first discovered the problem after receiving customer complaints in late 2014 and shortly before Magellan notified it in 2015 – even though Magellan had discovered the malfunction in 2013. “Magellan then sent a false timeline to the FDA, which omitted the company’s internal 2013 studies about the malfunction,” the government says. FDA eventually found that the devices could not accurately test samples, which lead to a recall of all devices.

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