Business Developments.

Business Developments

Aggressive warning wasn?t sent by Guidant

With its multibillion-dollar purchase of Guidant (Indianapolis) earlier this spring, Boston Scientific (Natick, Massachusetts) fully realized that it was taking on a heavy risk of large legal liability fees when, earlier this year, it acquired Guidant (Indianapolis). And those costs may have ballooned considerably early in June with the forced release of company documents indicating that it had composed a letter warning physicians concerning malfunctions of its implantable defibrillator devices but then didn?t put that letter in the mail.

The unmailed letter was among documents in the case unsealed - over the company?s objection - in relation to a product liability lawsuit in Texas. The letter is being interpreted as the company?s acknowledgement that the company was aware of the malfunctions but had decided to send only a standard warning to doctors that encouraged only increased monitoring of patients implanted with the devices.

The letter it did send can best be characterized as a routine ?product update,? but came after the company learned of a short-circuiting problem that had occurred in some units of two defibrillator models and is being linked to a variety of malfunctions and, in some cases, deaths.

The unsealed documents indicate that the rationale by Guidant executives not to issue a more pointed and aggressive warning about the malfunctions was that they feared creating ?undue alarm? about the problem and that it …