Guidant Forced to Toe the Moral Line

May 1st, 2010. By Hunter West

Tuesday a federal judge in Minneapolis rejected a plea deal arrangement that would have seen Guidant, the medical device manufacturer acquired by Boston Scientific about four years ago, plead guilty to a couple of misdemeanor charges and pay a fine. A big fine, mind you—$296 million, described as the largest fine ever thrown down in front of a medical device manufacturer. The relatively small fine paid by Toyota for leading the feds down the garden path is niggly in comparison. 

But that’s not the point. Given the risks associated with playing in the medical devices sandbox, one can assume that the players plan for this sort of thing. Their revenues are staggering as it is. And a plea of guilty to two misdemeanors, when the company knowingly vended life-saving devices that were faulty and led to the deaths of at least six individuals, just seems so wrong. 

A judge agreed, and rejected the deal. Donovan W. Frank noted in his ruling that the deal allowed the company to escape accountability. 

At least there were misdemeanor charges. How often have you heard companies of any stripe pay a huge fine for a proven misdeed but admit to NO wrongdoing? 

That’s like telling a child who knowingly was responsible for bad behavior, “okay Johnny, give Mummy five bucks and we’ll forget this ever happened…” 

No parent in his, or her right mind would ever offer that deal to a child. What are we teaching them? 

And yet, it appears de rigueur in big business. Do something bad, cop a plea where you don’t have to admit to anything, pay a fine for the privilege and move on. 

It is assumed that any new deal surrounding the Guidant situation involving those defective defibrillators will include a probationary structure as recommended by the judge, together with a fine. 

How big that fine will be, remains to be seen. Perhaps the same, perhaps smaller than the original. Either way it will be in the millions. 

As for where that money goes, I profess ignorance. Maybe it goes into a specific budget line, or to general revenues. A better place would be to help pay for the nation’s health care, just as fines levied to automotive manufacturers should go to fix up our roads and bridges—or finding a way to segregate massive trucks away from smaller cars, in an effort to mitigate the carnage on America’s roads when the ever-expanding rigs meet up with an increasingly-shrinking car. 

Or how about giving that money to the families of the victims? 

Sure, fines are important—even assuming big companies build that kind of thing into their business plans. The money could benefit someone, somewhere. 

But the payment of a huge fine should not prove a whitewash for moral irresponsibility. 

That’s the point the judge was making Tuesday.

Tags: guidant, medical devices

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