Monday, September 03, 2007

Boston Scientific’s Legal Paperwork Payoff

It’s enough to make you sick. The Attorney Generals from 35 states, seizing on the vulnerable, sue Boston Scientific because they smell blood, pay themselves instead of patients, and feel virtous.

They claim it’s because Boston Scientific didn’t tell their state’s constituents about defective defibrillators. Well, duh. A few doctors brought the story to the New York Times in 2005. Guidant had to fess up. And they had to pay at least $195 million for their sins.

But that wasn’t enough. Especially when your legal department is in need of much-needed cash. And lawyers know a bleeding cash cow when they see it. It seems Illinois was one such money-grubbing state:
As part of the settlement, Illinois Attorney General Lisa Madigan said Boston Scientific subsidiary Guidant Corp. has agreed to put in place safety programs and do first-ever public reporting of problems in the devices Guidant manufacturers.

The settlement would resolve a lawsuit Madigan filed Thursday in Sangamon County Circuit Court. She has asked Circuit Judge Patrick Londrigan to approve a proposed consent decree.
Fact: such a reporting system already exists. Additional monies are not required for this.

But it’s interesting to see where Illinois’ share of the $16.75 million payout by Boston Scientific will go:
The $605,000 for Illinois will reimburse the attorney general's office for costs associated with the investigation, said Debbie Hagan, chief of Madigan's consumer-protection division.
You don’t say? Not to the patients?
But Hagan said the settlement is most important because it establishes public reporting of defects and other safety measures - including an independent patient-safety advisory board - affecting one of the world's largest makers of implanted defibrillators.

"This is what we think is going to move the market along," she said. "We have brought physicians and the public into watching this process."
But Missouri’s press release tells the real story: that of the $16.75 million paid out to 35 states, only $1 million will go toward helping a few patients with reimbursement costs beyond the already-negotiated $2500 reimbursement amount:
Under the settlement with the Attorneys General, the warranty program will be extended for an additional six months, and the states will use up to $1 million from Guidant to reimburse warranty participants for expenses beyond $2,500.
So in reality, $15.75 million of Boston Scientific’s payout is for the lawyers’ time for their paperwork to submit the suit – a “pay us or we’ll sue even more” settlement, I guess. And the patients and the public get little in return above what has already been established. Given how little is returned to the patients affected, our legal system should be embarrassed instead of gloating about their achievements in press releases.

But at least our patients can expect higher prices for future defibrillator models to offset these predatory suits.

It seems Illinois’ Ms. Hagan and our Attorneys General are helping themselves and the legal market much more than their constituents or our health care system.


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