Blood Sugar Device Company Receives Huge Fine
The United States Attorney's Office for the Northern District of California, the United States Department of Justice and the Food and Drug Administration, announced today that Lifescan, Inc., a California subsidiary of Johnson & Johnson, pled guilty in federal court in San Jose to criminal charges today and was ordered to pay the government criminal and civil fines totaling $60 million. The criminal charges stemmed from defects in a blood glucose monitoring device which the company knew about but failed to disclose to customers or the FDA in obtaining approval to sell the device.
Lifescan is headquartered in Milpitas, California and is a wholly owned subsidiary of Johnson & Johnson. The company pled guilty to three counts of criminal charges contained in an Information filed by the U.S. Attorney's Office. The U.S. Attorney's Office charged Lifescan with: (1) introducing and delivering for introduction into interstate commerce a misbranded medical device, the SureStep Blood glucose monitoring device, in violation of 21 U.S.C. §§ 331(a) and 333(a)(1); (2) failing and refusing to furnish appropriate notifications and information to the Food and Drug Administration, in violation of 21 U.S.C. §§ 331(q)(1) and 333(a)(1); and (3) with respect to a medical device, submitting false and misleading reports to the Food and Drug Administration, in violation of 21 U.S.C. §§ 331(q)(2) and 333(a)(1).
As part of its plea and the sentencing which occurred simultaneously before U.S. District Court Judge Jeremy Fogel in San Jose, Lifescan was ordered to pay a criminal fine of $29.4 million and civil penalties, damages, attorneys fees and restitution to the United States f $30.6 million in accordance with a separate Civil Settlement Agreement. Lifescan will be on probation for three years, meaning that the Food and Drug Administration and U.S. Probation Office will oversee certain aspects as specified in the attachment to plea agreement of the corporation's functioning. In addition, Lifescan entered into a Civil Compliance Agreement with the Department of Health and Human Services (HHS)which provides for additional oversight of LIFESCAN by HHS.
According to the plea agreement, Lifescan's SureStep brand blood glucose monitoring system, manufactured and distributed between May 1996 and late 1997, had two defects that would cause SureStep meters to display problematic readings. One, a software defect, caused the SureStep to sometimes display an error message instead of a "HI" at blood glucose levels above 500 mg/dL and to always display an error message instead of a "HI" at blood glucose levels above 600 mg/dL. The second defect arose when the monitor's test strip was almost, but not quite, fully inserted. An "Incomplete Strip Insertion" could result in the meter displaying readings that were up to 90 percent less than the user's actual blood glucose level.
Lifescan admitted that it failed to describe the two defects in its submissions for FDA clearance to market the SureStep family of blood glucose monitors and failed to notify its customers of the defects. According to court documents, during 1996, 1997 and 1998, LIFESCAN received over 2,000 SureStep customer complaints of inaccurate low readings, some of which were attributable to incomplete strip insertion and over 700 complaints regarding error messages, some of which were attributable to high blood glucose. At least 61 of the error complaints were associated with illness or injury, including some hospitalizations.
Lifescan admitted in pleading guilty that it failed to advise customers about the two defects and failed to file Medical Device Reports with the FDA on some of the illnesses and injuries reported. The reports Lifescan did file with the FDA contained false, incomplete or misleading information in that they failed to disclose the existence of either the error defect or incomplete strip insertion problem.
In June 1998, Lifescan instituted a voluntary recall of all SureStep meters manufactured prior to July 27, 1997, which the FDA classified as a Class I recall.
A spokeperson for the U.S. Attorney's Office said in announcing the guilty plea, "Consumers are entitled to know, and the law demands, that all companies tell them honestly about problems and defects in medical devices. Corporations in the health care field must be held to a high standard about informing patients and the FDA about the dangers of their products."
"Today's action shows that FDA is serious about enforcing the law and protecting the public health," said FDA Commissioner Jane E. Henney, M.D. "People with diabetes need to be able to rely on the accuracy of products they use to monitor their blood glucose. Defective products that give inaccurate or misleading readings will not be tolerated, and we will take action against firms that market them."
The plea and sentence capped a three year investigation by the FDA's Office of Criminal Investigations, the Federal Bureau of Investigation, the Department of Health and Human Services Office of Inspector General, the Department of Veteran Affairs Office of Inspector General, Department of Defense Criminal Investigation Service, the Office of Consumer Litigation of the Department of Justice, the Commercial Litigation Branch of the Department of Justice and the Criminal and Civil Divisions of the United States Attorney's Office in San Francisco.
This case was prosecuted by Assistant United States Attorneys Jeffrey L. Bornstein and Anne-Christine Massullo on the criminal side and Joann Swanson on the civil side with assistance from Wayne Yee, financial analyst, Maryam Beros, paralegal and Stacy Willis and Christine Tian, legal technicians.
A copy of this press release and key court documents filed in the case may also be found on the U.S. Attorney's Office's website at www.usaondca.com.
All press inquiries to the U.S. Attorney's Office should be directed to Assistant U.S. Attorney Matthew J. Jacobs at (415) 436-7181.
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