United States District Court, D. Minnesota
UNITED STATES OF AMERICA and THE STATE OF CALIFORNIA, ex rel. STEVEN HIGGINS, Plaintiffs,
BOSTON SCIENTIFIC CORP., Defendant.
N. ERICKSEN UNITED STATES DISTRICT JUDGE.
Steven Higgins brings this qui tam action pursuant
to 31 U.S.C. §§ 3730(b)(1) and (c)(3), alleging
that Defendant Boston Scientific Corp. (“BSC”)
violated the federal False Claims Act, 31 U.S.C. §
3729(a)(1), and the California False Claims Act, Cal.
Gov't Code § 12651(a). After the Government and the
State of California declined to intervene, Higgins filed an
Amended Complaint [Dkt. No. 61], which BSC moves to dismiss.
Dkt. No. 63.
heart of Higgins' allegations is BSC's sale of
particular models of Cognis CRT-D and Teligen ICD
defibrillators in the United States from August 2008 through
July 2009. See, e.g., Am. Compl. ¶¶ 6, 12.
The Amended Complaint alleges that BSC, a company that
develops, makes, and sells medical devices, caused physicians
to make false claims for Medicare and other federal health
care program reimbursements by certifying that these
defibrillators were reasonable and necessary for the medical
procedures in which the devices were implanted. See,
e.g., id. ¶¶ 175, 182-83.
are medical devices that attach to a patient's heart by
connectors called “leads” and can deliver shocks
from the device's pulse generator to attempt to restore
the patient's heartbeats to a healthy rhythm.
See Am. Compl. ¶¶ 52-56. The leads are
connected to the pulse generator through a “header,
” which is a cap on top of the pulse generator that has
openings into which the leads are secured using “set
screws, ” which are then covered with “seal
plugs.” Id. ¶¶ 54-55. The attachment
of the leads to the pulse generator through the header must
be secure for the device to deliver shocks as needed. See
alleges that as part of a so-called “CRM
[i.e., Cardiac Rhythm Management] Identity
Campaign” in around 2008, BSC introduced redesigned
defibrillators under the new branding of Cognis and Teligen.
See Am. Compl. ¶¶ 71-77. The Cognis and
Teligen defibrillators were designed to be smaller and
thinner than competitors' devices, and BSC also marketed
them as having an “[i]mproved header, set screws and
seal plugs.” Id. ¶¶ 80-81.
medical device like a defibrillator, which is classified by
the United States Food and Drug Administration
(“FDA”) as a Class III device, must receive FDA
premarket approval (“PMA”) “to provide
reasonable assurance of its safety and effectiveness”
before it can be sold in the United States. 21 U.S.C.
§§ 360c(a)(1)(C), 360e(c)(1); Am. Compl. ¶ 36.
After the device has been approved, if the manufacturer wants
to make certain changes to the device, it must submit a PMA
supplement for FDA review and approval. 21 C.F.R. §
814.39(a); Am. Compl. ¶ 37. BSC filed a PMA supplement
for the Cognis and Teligen defibrillators on December 7,
2007. Am. Compl. ¶ 39.
February 2008, BSC began selling its new Cognis and Teligen
devices in Europe. Am. Compl. ¶ 83. Higgins alleges that
European physicians who began implanting the defibrillators
in patients quickly began to experience problems with the
devices' set screw/header configuration, and the doctors
reported the problems to BSC. Id. at ¶¶
84-85. In layman's terms, the problems were that the
leads were not securely connecting to the header and pulse
generator even when doctors followed standard implant
protocol, which undermined the devices' ability to
reliably provide shocks. See Id. ¶¶ 86-92.
BSC allegedly responded to the reports of problems by sending
the lead engineer for Cognis and Teligen, Sumi Dahm, to
Europe to “investigate and deal with the complaints,
” including by developing “coaching and implant
technique changes to the process of attaching the leads to
the set screw/header design, ” which were mere
“workaround” solutions but not “a real
fix” to the design defects in the header/set screw
configuration. Id. at ¶ 93.
alleges that in light of the problems being reported by
European physicians, BSC should have amended its PMA
supplement, which was still pending, to “alert the FDA
as to the screw/header malfunctions . . . .” Am. Compl.
¶ 94. By failing to amend its PMA supplement, BSC
allegedly misled the FDA in its review of the defibrillators
and rendered its supplement false and misleading in
presenting the devices as safe and effective. Id.
¶¶ 96-97. “Without the additional information
about Cognis and Teligen which BSC learned from the European
launch, the FDA approved the devices on May 8, 2008 for sale
in the United States.” Id. ¶ 98.
allegedly also concealed the problems being reported in
Europe from its United States sales staff-and other insiders,
including Higgins, who served on a BSC advisory board- as the
company prepared to launch the devices for United States
sales in summer 2008. Am. Compl. ¶¶ 100, 103-07.
Domestic sales began August 4, 2008, and doctors immediately
began implanting Cognis and Teligen defibrillators in
patients. Id. ¶ 109. Allegedly within days of
launch, BSC began receiving reports from all over the country
about malfunctioning with the set screws and header
connections. Id. ¶ 110. “Less than three
weeks after launch,  in an effort to avoid a recall of
Cognis and Teligen in the wake of a huge volume of reported
defects, BSC misleadingly introduced revised implant
instructions which suggested that the problems had to do with
the implant techniques used by physicians, ” rather
than defects with the devices themselves, and published these
revised instructions in a “white paper” on August
21, 2008. Id. ¶¶ 111-12 (describing
BSC's revised instructions to perform a “tug
test”). These instructions “were highly unusual
because typically connecting the leads to a cardiac
defibrillator is a straightforward, uncomplicated part of
implant surgery.” Id. ¶ 116.
received complaints from doctors across the country about
malfunctions related to the header and set screws.
See Am. Compl. ¶¶ 118, 121, 136. At a
meeting with particular customers to address their
complaints, BSC representative Dahm admitted that BSC had
been “aware of the malfunctions involving the set
screws/headers because the devices had been launched earlier
in the year in Europe and similar problems had occurred there
and had been reported to BSC.” Am. Compl. ¶ 124
(emphasis omitted); see also Id. ¶ 127 (similar
allegations with regard to a second meeting).
alleges that BSC implemented an informal policy to
deceptively minimize the FDA's awareness of issues with
Cognis and Teligen devices. Federal law required BSC to
report malfunction complaints to the FDA in adverse event
reports also referred to as medical device reports (MDRs).
See Am. Compl. ¶¶ 134-35; see
also 21 C.F.R. §§ 803.1(a) (referring to
medical device reporting requirements), 803.50(a) (requiring
the submission of adverse event reports by manufacturers).
Instead of reporting all of the complaints it received, at
the direction of its Cardiac Rhythm Management President Fred
Colen, BSC allegedly adopted an informal policy to submit
adverse event reports only if “a patient needed a
re-operation because of a faulty device, ” but not if a
doctor “had a difficult time with implantation . . .
and there were no significant patient complications.”
Am. Compl. ¶ 138.
also began developing revised versions of the Cognis and
Teligen defibrillators to fix what it allegedly knew were
design defects with the devices' set screw/header
configuration. See Am. Compl. ¶ 142. BSC
submitted a PMA supplement for FDA approval of the changes to
Cognis-but not Teligen-and deceptively referred to the
revisions as modifications without disclosing that they were
fixing defects in the initial versions of the device.
Id. ¶¶ 143-44, 147. “Lacking a full
and accurate description of the new Version 2 of the set
screw/header, the FDA approved the PMA Supplement on March
18, 2009 without any required action as to the defective
Version 1 devices.” Id. ¶ 148.
began selling “Version 2” of the devices in March
2009 but did not recall or stop selling the allegedly
defective original versions, which physicians continued to
implant. Am. Compl. ¶¶ 149-52. The company
prioritized sending the new, corrected versions to customers
who had complained the most. Id. at ¶¶
or his peers at the same hospital implanted the devices in at
least 14 patients between September 2008 through February
2009 for whom the hospital sought and received Medicare or
Medicaid/Medi-Cal reimbursement. See Am. Compl.
¶ 201; id. Ex. A.
20, 2009, the FDA issued a notice for the Class II recall of
the Cognis and Teligen devices “containing the original
set screw system.” Am. Compl. ¶ 161 (quoting FDA
notice). Allegedly based on BSC's misleading assurances
to the FDA that any issues with the devices became apparent
within 30 days of implanting, the FDA's recall was
limited to devices that had been implanted less than 30 days
before the recall. Id. ¶ 162.