Guidant Recalls 50,000 Heart Defibrillators Due to Flaw

Strategic Insights -

Flaws in Guidant's heart defibrillators have led to a widespread recall of 50,000 devices, affecting not only patients but also the company's proposed acquisition by Johnson & Johnson. The recall, worked out with the Food and Drug Administration, involves devices made as recently as last year and raises concerns about patient safety. At least two patients have died due to the device failure, with 43 other patients experiencing the problem. Guidant's voluntary recall leaves it up to doctors whether to replace the devices, revealing more widespread problems than previously disclosed.

Key Takeaways:

  • Guidant recalled 50,000 heart defibrillators due to a flaw that can lead to short-circuits, affecting devices made as recently as last year.
  • The recall involves three lines of defibrillators: Ventak Prizm 2, Contak Renewal, and Ventak Prizm AVT, Vitality AVT, and Renewal AVT.
  • At least two patients have died and 43 others experienced device failure due to the flaw.
  • Guidant has agreed to the recall with the Food and Drug Administration (FDA) and will work with physicians to decide whether to replace the devices.
  • The company's proposed acquisition by Johnson & Johnson may be affected by the recall, with Johnson & Johnson reaffirming its intention to close the deal in the third quarter.
  • An FDA investigation into Guidant's reporting of device malfunctions is ongoing, with the company having pleaded guilty to felony charges in the past for failing to report problems with an abdominal aortic graft product.
  • The U.S. Department of Health and Human Services is also investigating Guidant's handling of the defibrillator problems.

Statistics:

  • 50,000: Number of defibrillators recalled due to a flaw.
  • 17,000: Number of Ventak Prizm 2 units recalled.
  • 11,900: Number of Contak Renewal devices recalled.
  • 21,000: Number of Ventak Prizm AVT, Vitality AVT, and Renewal AVT devices recalled.
  • 1.5 billion: Dollar amount of cash on hand at the end of 2004.
  • 92 million: Fine imposed on Guidant for violating FDA reporting regulations in the past.
  • 2002: Year when the redesign of the Prizm 2 occurred to correct the flaw.
  • 3: Number of largest sellers of heart defibrillators and pacemakers globally, including Guidant.

Sources:

  • The Indianapolis Star, June 2005
  • The Minneapolis Star Tribune, June 2005
  • Food and Drug Administration (FDA) statement
  • Guidant Corporation press release
  • Johnson & Johnson press release
  • U.S. Department of Health and Human Services investigation