Originally Published MX March/April 2006

BUSINESS NEWS

While the bidding war raged over the acquisition of Guidant Corp. (Indianapolis), it was generally acknowledged by members of the investment community that whichever company emerged as the victor would have to spend a great deal of time and money addressing Guidant's widely reported product quality problems. Yet just hours after Boston Scientific Corp. (Natick, MA) bested rival suitor Johnson & Johnson Inc. (J&J; New Brunswick, NJ) and nailed down its $27.2 billion bid, the company learned that, in addition to cleaning up the problems at Guidant, it now has to get its own house in order.

In a strongly worded warning letter from FDA's Center for Devices and Radiological Health (CDRH; Rockville, MD), Boston Scientific was notified of "serious regulatory problems" with medical devices produced at its facilities in Natick, MA; Maple Grove, MN; and Spencer, IN. The letter also referred to three earlier warnings regarding the company's production plants in Watertown, MA; Glens Falls, NY; and Quincy, MA. According to FDA, Boston Scientific's inability to address these issues in a timely manner indicated a "systemic problem with the entire corporate quality management system."