Boston Scientific Liable for Pacemaker Swap Costs

(CN) - A pacemaker manufacturer that discovered a possible defect is liable for the costs of replacing the devices whether they were actually defective or not, the EU high court ruled Thursday.

Guidant - which was purchased by Boston Scientific in 2006 - noticed a possible defect in its pacemakers during quality control checks, finding that a component used to hermetically seal the devices may degrade over time. The defect could lead to a shorter battery life, causing a sudden loss of telemetry and pacing output without any warning to the patient wearing the device.

In 2005, the company sent letters to doctors advising them to remove and replace patients' pacemakers and made the replacements available free of charge.

But insurers for two German patients who received the new devices demanded reimbursement for the costs associated with the replacement, a demand that eventually ended up in a German court.

That court asked the European Court of Justice to weigh in on whether the original devices could be considered defective based solely on quality control checks - the patients' first pacemakers weren't tested before they were destroyed - and whether Boston Scientific could be held liable for costs associated with replacing the devices.

In an opinion issued Thursday, the EU high court held that given the vulnerability of patients with pacemakers, the devices are held to a higher safety standard than other medical products. Liability for a potential danger falls within those higher standards, the court held.

"Accordingly, where it is found that such products belonging to the same group or forming part of the same production series have a potential defect, it is possible to classify as defective all the products in that group or series without there being any need to show that the product in question is defective," the Luxembourg-based court wrote.

Furthermore, the costs associated with following the manufacturer's advice to replace the pacemakers can be considered "damage" for which the company is liable under EU law, the court added.

As to Boston Scientific's claims that Guidant had advised the cheaper and less invasive fix of deactivating a switch on a similar product - an implantable cardioverter defibrillator, or ICD - with the same defect, the German court must decide whether the fix corrected the defect or if replacements are warranted, the court concluded.

In 2013, Guidant agreed to pay the U.S. government $30 million to settle claims it knowingly sold defective defibrillators to be implanted into Medicare patients' hearts.

In that case, federal prosecutors said Guidant knew as early as 2002 that the devices could arc and short-circuit themselves.

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