Boston Sci Employee Found Guilty in Criminal Case

Boston Sci is looking at $1M in fines from Italian court in relation to one of its employees financing unauthorized clinical trials.

Boston Scientific faces $1 million in fines after an Italian court found one of its employees guilty in a criminal case, according to an SEC filing.

On Feb. 23, 2015, the judge for the Court of Modena (Italy) ordered a trial for the Marlborough, MA-based company and three of its employees as well as numerous other defendants charged in criminal proceedings.

Those charges arise from allegations that the defendants made improper donations to certain healthcare providers and other employees of the Hospital of Modena in order to induce them to conduct unauthorized clinical trials, as well as related government fraud in relation to the financing of such clinical trials, the company said.

In its regulatory filing, Boston Scientific said on Dec. 1, 2015, the Brazilian governmental entity known as the Administrative Council of Economic Defense (CADE) served a search warrant for the offices of its Brazilian subsidiary, as well as on the Brazilian offices of several other major medical device makers, in furtherance of an investigation into alleged anti-competitive activity with respect to certain tender offers for government contracts.

The company went on to say that on June 20, 2017, CADE, through the publication of a “technical note,” announced that it was launching a formal administrative proceeding against Boston Scientific’s Brazilian subsidiary, Boston Scientific do Brazil Ltda.

In its filing, Boston Scientific said it would "continue to deny these allegations" and "defend itself vigorously." 

Litigation and lawsuits can be commonplace for large medtech companies, and Boston Scientific has certainly had its share throughout the years.

The firm is currently involved in litigation with Redwood City, CA-based Nevro, a neurostimulation specialist. In the lawsuit, Nevro alleges patent infringement related to its Senza and HF10 spinal cord stimulation systems.

Boston Scientific spent most of 2016 duking it out with Edwards Lifesciences over two patents related to transcatheter aortic valve replacement (TAVR) technologies.

The lawsuit was specifically over Edwards's Sapien 3 TAVR, introduced in the United States in 2015. The suit, filed in California, was aimed at a handful of Edwards's catheter delivery systems and a crimping tool used with the Sapien 3.

In 2015, Boston Scientific paid $600 million to Johnson & Johnson to settle the lawsuit the latter brought against the Massachusetts company over its purchase of Guidant in 2006.

J&J alleged that Guidant had breached the merger agreement it had when Boston Scientific became another bidder.

The lawsuit charged that Guidant allowed Abbott to conduct due diligence on a business unit that Abbott would buy to help Boston Scientific resolve any potential antitrust issues in its purchase of Guidant.

Perhaps the most significant lawsuits Boston Scientific faced came from women injured by the company’s Pinnacle and Advantage Fit vaginal mesh products. In 2014, Boston Scientific spent $1.036 billion in lawsuit expenses, of which $485 million was held in qualified settlement funds for mesh product liability settlement.

During that time, Boston Scientific was near the top of the medical device industry as far as legal bills were concerned.

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