Here’s a Bad Tip From Bard: Don’t Ask, Don’t Tell FDA
U.S. V. C.R. Bard, Inc. 848 F. Supp. 287 (Mass. 1994)

Briefed by: Nancy E. Isaac, Esq.

Abstract

In 1994, C.R. Bard was levied the highest fine in the history of FDA violations. Six employees, including the CEO, were indicted in connection with the failure of Bard’s Mini Profile catheter tips. The agreement, in which Bard pled guilty to 391 felony counts, spelled out specific measures meant to address the problems observed with regulatory compliance.

History

Bard’s Mini Profile angioplasty catheter was allegedly responsible for the deaths of two patients. Seventeen patients required bypass surgery after the use of the device, and the tip broke off during the catheterization of fifty others. Bard pled guilty to 391 counts and was also sued in civil court for state tort law damages.

Findings

The court found that “each of the 391 criminal violations was committed intentionally,” and that Bard knowingly and willfully “kept adverse information from FDA, made product changes that affected the safety or effectiveness of angioplasty catheters produced by its USCI Division without the required FDA approval, and illegally did testing on human beings without the required exemption from FDA.”

The counts were as follows:

  • 1 count of conspiracy
  • 17 counts of mail fraud involving sending submissions to FDA
  • 8 counts of submitting false statements to FDA
  • 363 counts of shipping adulterated medical devices, including:
    • 75 counts of shipping adultered devices from an unapproved facility
    • 108 counts of shipping products that had been changed without FDA approval
    • 98 counts of shipping the device for human testing whereby that testing had not been approved
  • 2 counts of failing to submit required reports to FDA

The court noted “a pervasive and powerful corporate culture exalted the value of profit above the value of human life.” One engineer wrote, “we never give our people enough time to accomplish their jobs but rather rush the program to the next step before it is ready. We feel enormous pressure from upper management and marketing to continue despite the unsolved technical issue… We chose not to address the design flaws, but rather to begin production and fix these things on the way… Were we so with the program that we failed to anticipate that something could be wrong? Does asking tough questions or making waves put one in the political s—house?”

FDA noted that there was not a single public whistle-blower in this case and that the officers and management at Bard during this time were “morally responsible for a corporate culture which placed potential profit above the value of human life.”

Results

Bard’s plea agreement imposed a civil settlement of $30,500,000, a criminal fine of $15,250,000 (payable within one year), another $15,250,000 criminal fine (payable within two years), and a $78,500 special assessment.*

Bard was required to implement specific corporate remedial measures and keep them in place for four years, including:

  • Reorganization to minimize the risk of this happening again
  • Implementation of a new corporate compliance program
  • Hiring of a new VP for scientific affairs with responsibility for medical and regulatory affairs company-wide
  • Creation of a Regulatory Compliance Committee of the Board of Directors
  • Retention of an outside RA compliance consultant to inspect the company annually and report findings to Bard and FDA
  • Adoption of additional reporting requirements to FDA

In addition, the court waived all applicable time limits for Bard’s applications to test or market its medical devices so FDA could have the time it needed to scrutinize these applications.**

Bard was also “obliged to cooperate fully and truthfully in the investigation and prosecution of its present and former officers and employees.”

Six Bard employees, including the former Chairman of the Board and CEO were indicted. The court wished to send a message that crimes have “serious personal consequences and… to deter future criminal conduct.”

Bard agreed to prepare a letter to cardiologists explicitly explaining the crimes and products involved in this suit.

Conclusions

This case is a good outline for the type of compliance and accountability program that, when functioning correctly and possessing the appropriate authority, can prevent product failures that result in criminal and civil penalties and, most importantly, the suffering and death of those who our industry is dedicated to helping.

* The total of $61,000,000 is based on government estimates of gross sales of all relevant catheters net of returns and recalls. The special assessment was calculated by assessing $200 for each of the 391 counts. The total is more than three times higher than any other fine ever imposed in an FDA case.
** Authority under FDA’s Applications Integrity policy.