Olympus’ former top regulatory official has dodged a prison term for failing to file adverse event reports with the FDA regarding infections connected to contaminated duodenoscopes, according to published reports.
Hisao Yabe, 64, and Tokyo-based Olympus (TYO:7733) both entered guilty pleas in December in U.S. District Court in Newark, N.J. for failing to file the reports and continuing to sell the devices in the United States despite those failures. Judge Stanley Chesler rejected the government’s request to sentence Yabe to prison for six months, noting the lack of evidence of fraudulent intent and the fact that Yabe had voluntarily come to the United States to face the charge.
Yabe’s “personal and professional disgrace” also counted in his favor in avoiding prison, Chesler said during sentencing, according to a report by Law360. “You deserve to be professionally disgraced.”
Olympus has been mired in legal trouble over its duodenoscopes, devices that were designed to be re-used once cleaned or reprocessed by a healthcare facility. The scopes proved difficult to clean and have been implicated in superbug outbreaks in the U.S. and Europe.
Olympus admitted that it failed to file adverse event reports with the FDA in 2012 and 2013 relating to three separate events involving infections in Europe connected to Olympus’s TJF-Q180V duodenoscope (Q180V): the infection of approximately 22 patients with Pseudomonas aeruginosa at the Erasmus Medical Center in the Netherlands in early 2012; the infection of three patients with Escherichia coli at Clinique de Bercy in France in November 2012; and the infection of five patients with Pseudomonas aeruginosa at Kremlin Bicetre in France in July 2012.
Olympus admitted that it failed to make the required initial MDR filing regarding the Kremlin Bicetre infections, and failed to file required supplemental MDRs relating to the Erasmus Medical Center and Clinique de Bercy infections, for which Olympus had filed initial MDRs. Under the FDCA, devices for which required MDRs and supplemental MDRs have not been filed are deemed misbranded, and it is a crime to ship such devices in interstate commerce. Between August 2012 and October 2014, Olympus shipped hundreds of misbranded duodenoscopes in the United States, generating approximately $40 million in revenue and approximately $33 million in total gross profit. Olympus’s payment of $85 million is more than 2½ times Olympus’s total profit from sales of the misbranded duodenoscopes.
Yabe admitted personal responsibility for failing to file the necessary information with FDA relating to the Erasmus Medical Center infections, according to a statement from the court. At the time, Yabe was Olympus’s quality and environment division manager, whose responsibilities included adverse event reporting in the United States.
Yabe also admitted that he was aware of Olympus’s obligation to file supplemental MDRs and was involved in Olympus’s failure to file a supplemental MDR regarding the Erasmus Medical Center infections and a report Olympus received prepared by an independent expert of Delft University of Technology in the Netherlands. That expert report — which Olympus obtained in the summer of 2012 — noted numerous problems with the Q180V, including that the Q180V’s tip had various cracks, corners, and crevices that could harbor bacteria and could be cleaned only with great difficulty. The report recommended immediate further investigation of all such scopes, updating the cleaning instructions, and improving the quality of the seal.
Yabe had faced a maximum penalty of a year in prison and a $100,000 fine, or twice the gain or loss from the offense.
In December, Chesler fined Olympus $80 million and ordered $5 million in criminal forfeiture, consistent with a plea agreement between Olympus and the justice department. Olympus must also abide by an agreement with the justice department requiring Olympus to enact extensive compliance reforms.