September 22,2005

Chairman Grassley questions medical device manufacturer on product safety

WASHINGTON — Sen. Chuck Grassley is asking the Guidant Corporation forinformation about the way it has complied with agreements it made with the federal governmentin order to continue doing business with the federal government after one of its subsidiariessettled criminal and civil charges two years ago.

“Taxpayers spend a lot of money through the Medicare and Medicaid programs formedical devices, so I have a responsibility to make sure these products are safe and that thefederal agency charged with reviewing their safety is doing its job,” Grassley said. “Nationalhealth care programs shouldn’t have to rely on a three strikes and you’re out program when livesare at stake.”

In recent months, Grassley asked for information from the Food and Drug Administrationabout its review of medical devices manufactured by the Guidant Corporation. His review of theFDA’s regulatory work with regard to these products is ongoing.

Here is the text of the letter Grassley sent today. Previous correspondence can be foundat

September 22, 2005

James M. Cornelius
Chairman of the Board


Ronald W. Dollens
President and Chief Executive Officer
Guidant Corporation
111 Monument Circle, #2900
Indianapolis, IN 46204-5129

Dear Mr. Cornelius and Mr. Dollens:

The Committee on Finance (Committee) has jurisdiction over the Medicare and Medicaidprograms, among other matters. Accordingly, the Committee is responsible to the more than 80million Americans who receive health care coverage under those programs, including paymentfor medical devices.

The Food and Drug Administration (FDA) is evaluating the safety and performance ofcertain implantable defibrillators and pacemakers manufactured by Guidant Corporation(Guidant). Today, Guidant issued another round of warnings to physicians and patients relatingto 40 models of implantable pacemakers. This recall comes on the heels of Guidant recallingnumerous other models of implantable pacemakers and defibrillators. In recent months, the FDAhas classified three Guidant defibrillators as a Class I recall and eight others as a Class II recall.In addition, the FDA classified several models of Guidant pacemakers as a Class I recall.

According to the FDA, a Class I recall means there is a reasonable probability that if aparticular device is malfunctioning, the malfunctioning device will cause serious adverse healthconsequences or death. For a Class II recall, the malfunctioning product may cause temporary ormedically reversible adverse health consequences, however, the probability of serious adversehealth consequences is remote.

On August 18, 2005, the FDA briefed Committee investigators regarding theaforementioned cardiac device recalls. During the briefing, my Committee staff were informedthat the FDA would begin a “comprehensive on-site inspection” the following week at Guidant’smanufacturing facilities. The stated purpose of the inspection was to review Guidant’smanufacturing practices and record maintenance. Among other issues, the FDA said it wouldreview the timing and completeness of Guidant’s regulatory reports, as well as the mechanismsthrough which Guidant filed its reports.

As you know, on June 30, 2003, Guidant entered into a Corporate Integrity Agreement(CIA) with the Office of Inspector General (OIG), Department of Health and Human Services.According to the preamble of the CIA, Guidant entered into the CIA “to promote compliance byits officers, directors, employees, contractors, and agents with the statutes, regulations, andwritten directives of Medicare, Medicaid, Food and Drug Administration (‘FDA’) complianceregulations and all other Federal health care programs (as defined in 42 U.S.C. § 1320a-7b(f))(‘Federal health care program requirements’).”

Among other requirements, the CIA specifies that Guidant shall maintain elements of acompliance program, including the following elements: Compliance Officer and Committee,Written Standards (i.e., Code of Business Conduct and Policies and Procedures), Training andEducation, Review Procedures, Disclosure Program, Notification of Government Investigation orLegal Proceedings, and Reporting (i.e., Reportable Events). Further, Guidant’s ComplianceOfficer must certify that Guidant is in compliance with all of the requirements of its CIA.

I write to request Guidant’s cooperation with the Committee’s investigation into, among otherconcerns, whether or not Guidant has fully and timely complied with all of its CIA obligations.As Chairman of the Committee, I request that Guidant produce the following documentsand information to the Committee:

1. A copy of Guidant’s Implementation Report, as submitted to the OIG, in accordance withCIA sec. V.A.

2. A copy of Guidant’s Annual Report(s), as submitted to the OIG to date, in accordancewith CIA sec. V.B.

3. A copy of and/or record of all quarterly reports from Guidant’s Chief Compliance Officerto the Board of Directors regarding compliance matters.

4. All copies of certifications retained by the Compliance Officer, in accordance with CIAsec. III.C.3.

5. A copy of the disclosure log maintained by the Compliance Officer, in accordance withCIA sec. III.E.

6. A copy of all written notifications of government investigation or legal proceedingsprovided by Guidant to the OIG, in accordance with CIA sec. III.G.

7. A copy of all reports submitted by Guidant to the OIG related to reportable events, inaccordance with CIA sec. III.H.

8. State whether or not Guidant has maintained all documents and records relating to FDArecord keeping requirements, or to compliance with the CIA, in accordance with CIA sec.VIII.

Please produce all documents related to requests 1 and 2 by September 30, 2005, unlesscopies are available sooner. All documents related to requests 3 through 7 are requested byOctober 7, 2005, unless copies are available sooner. Given Guidant’s CIA reporting obligations,these documents should be readily available for production to the Committee. Responsivedocuments should be produced and delivered in accordance with the attached general instructionsand definitions.

Thank you in advance for providing the name and contact information for a person whowill act as Guidant’s point of contact for the duration of the Committee’s investigation.


Charles E. Grassley