Mass. medical device company agrees to plead guilty, pay $42M to resolve criminal charges
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Mass. medical device company agrees to plead guilty, pay $42M to resolve criminal charges

A medical device company headquartered in Massachusetts has agreed to resolve criminal charges relating to its concealment of a device malfunction that produced inaccurately low lead test results, according to federal prosecutors.Magellan Diagnostics, Inc., which is based in Billerica, will plead guilty to violations of the federal Food, Drug and Cosmetics Act and pay a $21.8 million fine, $10.9 million in forfeiture and a minimum of $9.3 million to compensate patient victims, a total of $42 million.The U.S. Attorney’s Office announced Tuesday that the resolution also includes a deferred prosecution agreement to resolve felony conspiracy fraud charges against Magellan.Prosecutors said Magellan admitted that it misled its customers and the U.S. Food and Drug Administration about a serious malfunction that affected the company’s LeadCare devices when they were used to test venous blood samples.According to prosecutors, Magellan caused an estimated tens of thousands of children and other patients to receive inaccurately low lead test results by hiding the malfunction and later deceiving customers and the FDA about when the company discovered the malfunction; the nature, extent and frequency of the malfunction; and the risks associated with the malfunction.Magellan’s devices — LeadCare Ultra, LeadCare II and LeadCare Plus — detected lead levels and lead poisoning in the blood of children and adults using either venous or fingerstick samples.Prosecutors said LeadCare II, which was predominantly used to test fingerstick samples, accounted for more than half of all lead blood tests conducted in the United States from 2013 to 2017. LeadCare Plus and LeadCare Ultra, meanwhile, were predominantly used to test venous samples.According to prosecutors, Magellan first learned that a malfunction in its LeadCare Ultra device could cause lead test results that were falsely low during the FDA clearing process in June 2013. The company, however, released LeadCare Ultra to the marked six months later without informing customers or the FDA of the malfunction.The U.S. Attorney’s Office said that several months after the release of LeadCare Ultra, customers independently discovered the malfunction and complained about inaccurate results. In response, Magellan told its customers that it had only recently identified the malfunction and had not observed the malfunction in its clinical trials prior to product release — even though the company had known about the malfunction for over a year and before the device was released. Magellan’s testing in 2013 also indicated that the same malfunction affected the LeadCare II device, which was by far Magellan’s highest-revenue product, according to prosecutors.Prosecutors said Magellan did not notify its customers and the FDA about the LeadCare II malfunction until November 2016. In 2017, the FDA contacted Magellan and asked when the company first discovered the malfunction. According to the U.S. Attorney’s Office, Magellan’s representative falsely told the FDA that Magellan first discovered the problem after receiving customer complaints in late 2014 and shortly before Magellan notified the FDA in 2015. The company then sent a false timeline to the FDA, which omitted the company’s internal 2013 studies about the malfunction.The FDA ultimately found that the LeadCare Devices could not accurately test venous samples, leading to a recall of all LeadCare Devices using venous samples and a warning to the public not to use LeadCare Ultra, LeadCare II and LeadCare Plus for venous blood samples because of the malfunction. According to the U.S. Centers for Disease Control and Prevention, there is no safe level of lead in the blood. Lead exposure may cause irreversible lifelong physical and mental health problems. Young children and pregnant women are most vulnerable to lead exposure, especially those from low-income households. Those who live in housing built before 1978 are also especially vulnerable to lead exposure because those homes are more likely to contain lead-based paint and have fixtures containing lead. In a news release, Magellan Diagnostics confirmed it has finalized an agreement with the U.S. Department of Justice that resolves the DOJ’s investigation of the company.Magellan said the investigation started in 2018 and primarily involved conduct by former employees that occurred between 2013 and 2017. According to the company, the settlement does not affect the ongoing prosecution of Magellan’s former chief executive officer Amy Winslow, former chief operating officer Hossein Maleknia and Reba Daoust, the company’s former director of quality assurance and regulatory affairs.”We are pleased to have reached an amicable resolution concerning issues that happened nearly a decade ago with Magellan,” Tony Serafini-Lamanna, president of Magellan Diagnostics, said in a statement. “Magellan and Meridian engaged constructively with the DOJ to develop a mutually acceptable resolution, including fully cooperating with the DOJ and providing resources to support victims that were impacted.”Magellan takes seriously our responsibility to provide reliable, FDA-cleared products to support some of our most vulnerable populations,” Serafini-Lamanna stated. “The underlying issues that affected the results of some of Magellan’s products from 2013 to 2018 have been fully and effectively remediated. Today, the devices and tests sold by Magellan are safe, FDA-cleared and are performing as intended.”Magellan also said in its news release that the use of venous blood samples was discontinued in 2018, and that copies of the settlement documents and information regarding the victim compensation fund will soon be available on the company’s website.The U.S. Attorney’s Office and Magellan both said the company has agreed to compensate all patients who were demonstrably harmed for the pecuniary damages they suffered as a result of the malfunction in the company’s blood lead testing devices.People who believe they received an inaccurate blood lead test result from a LeadCare device between 2013 and 2017 are encouraged by prosecutors to complete a questionnaire located on the Federal Bureau of Investigation’s website by clicking here.The U.S. Attorney’s Office said information about the status of the case is located on its website, which can be reached by clicking here.Previous coverage:

A medical device company headquartered in Massachusetts has agreed to resolve criminal charges relating to its concealment of a device malfunction that produced inaccurately low lead test results, according to federal prosecutors.

Magellan Diagnostics, Inc., which is based in Billerica, will plead guilty to violations of the federal Food, Drug and Cosmetics Act and pay a $21.8 million fine, $10.9 million in forfeiture and a minimum of $9.3 million to compensate patient victims, a total of $42 million.

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The U.S. Attorney’s Office announced Tuesday that the resolution also includes a deferred prosecution agreement to resolve felony conspiracy fraud charges against Magellan.

Prosecutors said Magellan admitted that it misled its customers and the U.S. Food and Drug Administration about a serious malfunction that affected the company’s LeadCare devices when they were used to test venous blood samples.

According to prosecutors, Magellan caused an estimated tens of thousands of children and other patients to receive inaccurately low lead test results by hiding the malfunction and later deceiving customers and the FDA about when the company discovered the malfunction; the nature, extent and frequency of the malfunction; and the risks associated with the malfunction.

Magellan’s devices — LeadCare Ultra, LeadCare II and LeadCare Plus — detected lead levels and lead poisoning in the blood of children and adults using either venous or fingerstick samples.

Prosecutors said LeadCare II, which was predominantly used to test fingerstick samples, accounted for more than half of all lead blood tests conducted in the United States from 2013 to 2017. LeadCare Plus and LeadCare Ultra, meanwhile, were predominantly used to test venous samples.

According to prosecutors, Magellan first learned that a malfunction in its LeadCare Ultra device could cause lead test results that were falsely low during the FDA clearing process in June 2013. The company, however, released LeadCare Ultra to the marked six months later without informing customers or the FDA of the malfunction.

The U.S. Attorney’s Office said that several months after the release of LeadCare Ultra, customers independently discovered the malfunction and complained about inaccurate results. In response, Magellan told its customers that it had only recently identified the malfunction and had not observed the malfunction in its clinical trials prior to product release — even though the company had known about the malfunction for over a year and before the device was released.

Magellan’s testing in 2013 also indicated that the same malfunction affected the LeadCare II device, which was by far Magellan’s highest-revenue product, according to prosecutors.

Prosecutors said Magellan did not notify its customers and the FDA about the LeadCare II malfunction until November 2016. In 2017, the FDA contacted Magellan and asked when the company first discovered the malfunction. According to the U.S. Attorney’s Office, Magellan’s representative falsely told the FDA that Magellan first discovered the problem after receiving customer complaints in late 2014 and shortly before Magellan notified the FDA in 2015. The company then sent a false timeline to the FDA, which omitted the company’s internal 2013 studies about the malfunction.

From top to bottom, a look at Magellan Diagnostics' LeadCare Plus, LeadCare II and LeadCare Ultra devices that detected lead levels and lead poisoning in the blood of children and adults.

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From top to bottom, a look at Magellan Diagnostics’ LeadCare Plus, LeadCare II and LeadCare Ultra devices that detected lead levels and lead poisoning in the blood of children and adults.

The FDA ultimately found that the LeadCare Devices could not accurately test venous samples, leading to a recall of all LeadCare Devices using venous samples and a warning to the public not to use LeadCare Ultra, LeadCare II and LeadCare Plus for venous blood samples because of the malfunction.

According to the U.S. Centers for Disease Control and Prevention, there is no safe level of lead in the blood. Lead exposure may cause irreversible lifelong physical and mental health problems. Young children and pregnant women are most vulnerable to lead exposure, especially those from low-income households. Those who live in housing built before 1978 are also especially vulnerable to lead exposure because those homes are more likely to contain lead-based paint and have fixtures containing lead.

In a news release, Magellan Diagnostics confirmed it has finalized an agreement with the U.S. Department of Justice that resolves the DOJ’s investigation of the company.

Magellan said the investigation started in 2018 and primarily involved conduct by former employees that occurred between 2013 and 2017. According to the company, the settlement does not affect the ongoing prosecution of Magellan’s former chief executive officer Amy Winslow, former chief operating officer Hossein Maleknia and Reba Daoust, the company’s former director of quality assurance and regulatory affairs.

“We are pleased to have reached an amicable resolution concerning issues that happened nearly a decade ago with Magellan,” Tony Serafini-Lamanna, president of Magellan Diagnostics, said in a statement. “Magellan and Meridian engaged constructively with the DOJ to develop a mutually acceptable resolution, including fully cooperating with the DOJ and providing resources to support victims that were impacted.

“Magellan takes seriously our responsibility to provide reliable, FDA-cleared products to support some of our most vulnerable populations,” Serafini-Lamanna stated. “The underlying issues that affected the results of some of Magellan’s products from 2013 to 2018 have been fully and effectively remediated. Today, the devices and tests sold by Magellan are safe, FDA-cleared and are performing as intended.”

Magellan also said in its news release that the use of venous blood samples was discontinued in 2018, and that copies of the settlement documents and information regarding the victim compensation fund will soon be available on the company’s website.

The U.S. Attorney’s Office and Magellan both said the company has agreed to compensate all patients who were demonstrably harmed for the pecuniary damages they suffered as a result of the malfunction in the company’s blood lead testing devices.

People who believe they received an inaccurate blood lead test result from a LeadCare device between 2013 and 2017 are encouraged by prosecutors to complete a questionnaire located on the Federal Bureau of Investigation’s website by clicking here.

The U.S. Attorney’s Office said information about the status of the case is located on its website, which can be reached by clicking here.

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