$80 Million Fine Issued to Company for Failing to File Reports on Infections
"Medical device adverse event reporting requirements are designed to protect Americans by providing FDA with a tool to detect potential safety issues. When device manufacturers fail to report adverse events, unsuspecting patients are placed at risk," said FDA Commissioner Dr. Scott Gottlieb, M.D.
Olympus Medical Systems Corporation and a former senior executive pleaded guilty Dec. 10 in Newark, N.J., to failing to file required adverse event reports involving infections connected to duodenoscopes and also to continuing to sell the duodenoscopes in the United States despite those failures, the U.S. Justice Department announced. Olympus, which is located in Tokyo, Japan, and Hisao Yabe, 62, of Japan, entered guilty pleas before U.S. District Court Judge Stanley R. Chesler -- Olympus to three counts and Yabe to one count, of distributing misbranded medical devices in interstate commerce in violation of the Federal Food, Drug, and Cosmetic Act.
The DOJ release said Judge Chesler also sentenced the company Dec. 10, fining Olympus $80,000,000 and ordering $5,000,000 in criminal forfeiture. The sentence is consistent with a plea agreement between Olympus and the Justice Department. Olympus also must abide by an agreement with the department requiring Olympus to enact extensive compliance reforms. Yabe is scheduled to be sentenced by Chesler on March 27, 2019; Yabe faces a maximum potential penalty of a year in prison and a $100,000 fine, or twice the gain or loss from the offense.
Olympus admitted that it failed to file with the U.S. Food and Drug Administration required adverse event reports in 2012 and 2013 relating to three separate events involving infections in Europe connected to the company's TJF-Q180V duodenoscope. Approximately 22 patients were infected with Pseudomonas aeruginosa at the Erasmus Medical Center in the Netherlands in early 2012, three patients were infected with Escherichia coli at Clinique de Bercy in France in November 2012, and five patients were infected with Pseudomonas aeruginosa at Kremlin Bicetre in France in July 2012, according to the release, which said Yabe admitted his own personal responsibility for the failure to file the necessary information with FDA relating to the Erasmus Medical Center infections. Yabe was Olympus' division manager for the Quality and Environment Division at the time, making him Olympus' top regulatory official, with his responsibilities including adverse event reporting in the United States.
"Medical devices, such as the Olympus duodenoscope that is used in 500,000 procedures per year in the United States, can extend and improve the quality of life for many people," said Assistant Attorney General Jody Hunt for the department's Civil Division. "But when a device manufacturer becomes aware of risks that could lead to illness, injury, or death, there is a statutory obligation to report that information to the FDA in a timely manner. By failing to do so, Olympus and Mr. Yabe put patients' health at risk."
"Medical device adverse event reporting requirements are designed to protect Americans by providing FDA with a tool to detect potential safety issues. When device manufacturers fail to report adverse events, unsuspecting patients are placed at risk," added FDA Commissioner Dr. Scott Gottlieb, M.D. "We take our patient safety mission very seriously and we remain fully committed to aggressively pursuing those who jeopardize public health by subverting FDA's regulatory requirements."
As part of its plea agreement, Olympus has agreed to retain an independent Medical Device Report expert to inspect and review its policies and procedures to determine their compliance with the MDR requirements; periodic review by the MDR expert of Olympus' continued compliance with the requirements; and conduct a review and audit of the device classification and market pathway for all endoscope device types manufactured by Olympus that are intended for use in the sterile body cavity and that are currently sold in the United States. The MDR expert will report back to FDA and the Justice Department periodically for three years, and the president of Olympus and Olympus' board of directors will periodically conduct a review of the company's MDR compliance measures and classification/marketing pathway review and provide certifications to FDA and the Justice Department relating to those reviews. Olympus also must inform health care providers in the United States who received Q180Vs between August 2012 and October 2014 of the company's guilty plea and provide information to those health care providers regarding its failure to file the required MDRs.