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Home » Boston Scientific legal update: Pelvic mesh looms, Guidant makes progress

Boston Scientific legal update: Pelvic mesh looms, Guidant makes progress

March 4, 2014 By Arezu Sarvestani

Boston Scientific legal update: Pelvic mesh looms, Guidant makes progress

Massachusetts medical device giant Boston Scientific (NYSE:BSX) has dozen of legal irons in the fire at any given moment, some making forward progress while others cast an ominous shadow.

In the company’s most recent 10-k annual report BSX provided updates on its most pressing legal issues, noting ever-increasing interest in lawsuits over the company’s transvaginal mesh, some progress in a class action lawsuit over subsidiary Guidant’s implants and a new jab from rival Medtronic (NYSE:MDT) over controversial renal denervation technology.

The great pelvic mesh debacle

BSX is still on the hook for thousands of lawsuits claiming that the company’s transvaginal mesh caused injuries and that BSX is guilty of fraud, failure to warn and other offenses. As of late last month there are at least 18,000 filed mesh lawsuits or claims in the U.S., including 8 putative class action lawsuits. More than 1,700 U.S. cases are pending in a single Minnesota state court. There are also more than 10 lawsuits filed in Canada, 3 of them class action.

BSX is not alone in facing a flood of pelvic mesh complaints. A raft of companies, including  Endo Health Solutions (NSDQ:ENDP), Cook Medical and Johnson & Johnson‘s (NYSE:JNJ) Ethicon subsidiary, are facing some federal and personal lawsuits over their mesh offerings.

Last year BSX got a March 2014 trial date for the 1st in its mesh lawsuits and a report surfaced that 5 accused device companies companies are looking to settle the cases en masse, with Ethicon the lone holdout. Just last month J&J won its 1st bellwether pelvic mesh trial when a federal judge tossed the case out of court.

The lawsuits have brought BSX under the federal microscope, spurring a civil investigation launched by the Attorney General for the State of California and other unidentified state attorneys general offices. Additional offices submitted discovery requests during the company’s most recent quarter, BSX said.

The company is responding to those requests and has established a product liability accrual to deal with existing and potential future claims, according to the report.

"We intend to vigorously contest the cases and claims asserted against us," BSX said. "However, the final resolution is uncertain and could have a material impact on our results of operations, financial condition and/or liquidity."

A renal denervation jab from Medtronic

Prior to this year’s high-profile fallout over missed expectations for renal denervation, Medtronic Ardian Luxembourg filed a lawsuit in a German court accusing BSX’s denervation systems of patent infringement.

Medtronic claimed that BSX’s Vessix renal denervation product violates patents owned by its Ardian subsidiary, landing a hearing date for later this year.

The lawsuit came just a few months before Medtronic revealed its Symplicity renal denervation device missed its primary efficacy endpoint when compared with a placebo in a blinded study. Full results from the trial are slated to drop at the American College of Cardiology conference this month.

Boston Scientific (NYSE:BSX) has slowed its clinical trials while still defending the technology, saying that mechanical differences between its and Medtronic’s devices may play a role in producing better results.

Guidant progress in Canada

There’s a growing light at the end of the tunnel for BSX and its long-troubled Guidant subsidiary as the parties in a Canadian lawsuit have agreed in principle to put the matter to rest with a settlement of about $3 million, BSX reported.

There are fewer than 10 Guidant cases left in the U.S. and about 30 abroad, BSX said. There are 6 class action lawsuits pending in Canada, 4 of which are waiting on results from 2 bellwether class actions. The Canadian lawsuits are divided in pacemaker patients and defibrillator patients, as well as separate class actions for families of pacemaker patients and families of defibrillator patients.

The parties in the defibrillator class action came to terms on a prospective $3 million settlement, which is slated for hearing later this month.

BSX revealed last fall that it has been in settlement discussions with various parties involved in the litigation over its problematic Guidant subsidiary and certain of its implantable defibrillators. BSX has already paid $300 million to settle claims against Guidant Corp., a company it acquired in 2006 for $26 billion.

Prior to the merger, Guidant discovered design flaws in one of its implantable cardiac defibrillators but didn’t disclosed that flaw and similar problems with another device until 2005. Those failures turned out to be costly for Guidant’s new parent, which in 2009 settled a case with the U.S. Justice Dept., agreeing to pay penalties of $296 million. Guidant also admitted to 2 misdemeanor counts of failing to supply certain information to U.S. regulators.

BSX in October 2013 agreed to pay another $30 million to settle a False Claims Act lawsuit that accused Guidant of making false claims about the defibrillators between 2002 and 2005.

Other matters

A few new lawsuits cropped up in the the last few months, including one filed by Kardiametrics that claims BSX and several other companies infringed on patents for blood clot capture and removal devices. Late in January BSX filed to dismiss the lawsuit or to stay the case pending arbitration. Kardiametrics has also lobbed its infringement accusations against  Covidien (NYSE:COV), Abbott(NYSE:ABT) and others, claiming violations of patients it acquired in April 2013.

Just last month Texas-based Atlas IP LLC sued BSX for alleged patent infringement, claiming that the LATITUDE patient management systems and related products are in violation. The LATITUDE system provides remote monitoring of patient implants and other healthcare devices that connect with the patients’ at-home "communicator" and transmit data to a web server accessible to doctors and healthcare providers.

BSX also reported that it’s scheduled for a hearing later this month in a lawsuit over catheter patents. Filed in Germany in 2007, the lawsuit claims that BSX’s 1995 license agreement for the technology is invalid. The case is on the docket for March 28.

Filed Under: Legal News, News Well, Patent Infringement Tagged With: Boston Scientific

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