Executive Summary

Firm's Guidant subsidiary will plead guilty to two misdemeanor charges related to its failure to include information in product safety reports to FDA, Boston Scientific announces Nov. 6. The plea is part of a settlement with the Department of Justice stemming from an investigation launched in 2005 by the U.S. Attorney's Office in Minneapolis (1"The Gray Sheet" Oct. 31, 2005). The federal investigators scrutinized whether then-independent Guidant made timely disclosures to FDA regarding malfunctions of its Ventak Prizm 2, Contak Renewal and Contak Renewal 2 implantable defibrillators. The products were the subject of a series of product safety advisories in 2005 amid criticism of industry and FDA processes for disclosing, tracking and responding to adverse event data. As part of the agreement, Boston Scientific will pay $296 million. On the same day, Boston Scientific disclosed to the Securities and Exchange Commission that it received a subpoena on Sept. 25 from the Health and Human Services Office of Inspector General requesting information relating to contributions made by the company's cardiac rhythm management division "to charities with ties to physicians or their families." The firm says it is "working with the government to understand the scope of the subpoena.