The U.S. Food and Drug Administration has sent a letter to Boston Scientific warning of ongoing quality control issues, the medical device maker said Friday.
The letter warned Boston about the procedures, processes, and timeliness of the company’s quality management system. It also warned Boston about “ongoing systemic violations” of the FDA’s quality control standards.
Boston Scientific won its battle with Johnson & Johnson for a $27-billion acquisition of Guidant on Wednesday, so it is in a precarious period as it awaits regulatory approval of its plan to purchase the heart device maker while divesting some of its assets to Abbott Laboratories to satisfy antitrust concerns (see Guidant Picks Boston for $27B).
GuidantGuidant Picks Boston for $27BBoston also said it received a second communication saying an FDA inspection of the manufacture of its TAXUS, Carotid Wallstent, and Liberté stent systems at a Galway, Ireland, manufacturing facility had been concluded without any observations reported.
Shares of Boston Scientific fell $1.14 to $22.01 in recent trading.
Regulatory Issues
The warning letter advised Boston that recent FDA inspections at three of its facilities had uncovered serious regulatory problems. The FDA told top management that the corporate-wide corrective actions it had undertaken in response to three prior warning letters last year were inadequate.
The FDA’s letter also expressed concern about Boston’s quality control systems at six of its facilities, along with recent recalls.
However, the warning letter does not require Natick, Massachusetts-based Boston Scientific to issue any product recalls. Boston said it did not plan to advise any hospitals to discontinue usage of the products covered in the warning letter, such as the TAXUS paclitaxel-eluting coronary stent system.
According to Boston, the letter focused on issues related to the review, analysis, and reporting of product complaints.
‘Serious but Manageable’
“We believe that the FDA’s corporate warning letter to Boston Scientific is serious but manageable, wrote SG Cowen analyst Dhulsini de Zoysa in a research note. “The issues are primarily procedural in nature. There are no product observations against TAXUS. Still, the timing of the FDA’s action is unfortunate.”
Boston said it recently established a global complaint information system to help address issues related to the ones outlined in the warning letter. The company is also trying to improve its quality control systems and will be meeting with the FDA next week to discuss the issues.
“We have clearly not done enough to resolve the issues raised by the FDA last year,” said Boston CEO Jim Tobin. “We are confident we have addressed many of these issues, but others have not yet been fully resolved.”
He said he was pleased with the results of the FDA’s inspection of its Ireland plant, but that his company planned to work further with the FDA to resolve the issues.