Boston Scientific

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Boston Scientific Corporation (BSX) is a Massachusetts-based medical device manufacturer.  The company employs 23 thousand people worldwide with operations in 40 countries and on 6 continents.  Boston Scientific manufactures diagnostic and treatment devices for a wide variety of health specialties including chronic pain, surgery, cardiology, gynecology, pulmonary disease and urology.

Boston Scientific was founded in 1979 as a holding company intended to purchase Medi-Tech, an interventional medicine company.  The first Boston Scientific product was a polyethylene (flexible plastic) balloon used for peripheral angioplasty to open clogged arteries.

Within two years, the device was the “industry standard” and led to the development of several later generation cardiac interventional devices including the adult aortic valvuloplasty balloon which was listed as one of the nine most important regulatory approvals of 1990 by the FDA.  It was the first of many cardiology products.  The company has since developed additional interventional cardiology devices including the wildly successful “TAXUS Express”, drug-eluting coronary stent.

Through the 1980’s and 90’s, the company acquired several medical device manufacturers to expand its presence in cardiology and reach into other therapeutic areas such as urology, neurology and surgery.  The company went public in May of 1992 and was producing an estimate $1.8 billion in annual revenue by 1997.

The most successful BSX product, the TAXUS Express was introduced in 2004 but shortly after that, profits began to fall and the company began series of court battles over patent infractions and hiring practices.

Boston Scientific acquired Guidant, a manufacturer of implantable defibrillation devices for $27 billion in 2006 in a bidding war with the pharmaceutical giant, Johnson and Johnson which resulted in a $5.5 billion 2006 antitrust lawsuit.  The vascular business was portioned off to Abbott Labs and the claim was dismissed.

During that time period, the US Department of Justice was investigating Guidant for sales of defective defibrillators to Medicare patients.  Cases regarding the defective devices were settled in 2013 with a $30 million payment by BSX to patients and their families.

In 2010, the company was fined $600 thousand by the US DOJ after paying kickbacks to an Army physician for using BSX devices and recommending them to other doctors BSX has also been involved in patent litigation with a Chinese device manufacturer, OrbusNeich which claimed that BSX could not sell their products in certain markets.  The claim of territory infringement resulted in the police being called to BSX German headquarters for product seizure but the dispute was mutually settled in 2013 under undisclosed terms.

In the same year, the company paid $1.73 billion to Johnson and Johnson to settle a patent infringement lawsuit over heart stents and Abbott Labs accused Boston Scientific of employee poaching with the hiring of a former Vice President and several sales directors in Abbott’s cardiac division.  Abbott filed a federal lawsuit against BSX but the case has not yet been settled.

In addition to questionable business practices, Boston Scientific currently faces hundreds of lawsuits regarding its transvaginal mesh products used for the treatment of pelvic organ prolapse and stress urinary incontinence in women.  In 2013, Boston Scientific had estimated revenue of over $7.1 billion.

Boston Scientific and Transvaginal Mesh

Introduced in the 1990’s, transvaginal mesh was modeled after mesh that was in use for hernia and other surgical repair procedures.  The first transvaginal mesh product, the ProtoGen Sling by Boston Scientific was approved in 1996 but was recalled just three years later due to safety concerns.

Transvaginal mesh is approved to treat pelvic organ prolapse and stress urinary incontinence in women.  It is implanted “transvaginally” or through the vagina, rather than requiring a more invasive abdominal surgery.  It was intended to improve the safety and efficacy of surgical treatments but has been shown to cause a number of serious adverse events.  These side effects can be permanently damaging, disabling and even life-threatening.

Serious events caused by transvaginal mesh can include:
  • Vaginal erosion – the mesh can erode the vaginal wall causing tissue shrinkage, severe bleeding and extreme pain
  • Organ perforation – the mesh may erode all the way through the vaginal wall or sometimes into other abdominal organs
  • Revision surgery – surgery may be required to repair damage caused by transvaginal mesh and to address the original condition which has not been resolved
Boston Scientific transvaginal mesh products that may have caused injury include:
  • Advantage Transvaginal Mid-Urethral Sling System
  • Arise Vaginal Support System
  • Lynx Suprapubic Mid-Urethral Sling System
  • Obtryx Sling Systems
  • Pinnacle Pelvic Floor Repair Kit
  • Polyform Synthetic Mesh
  • Prefyx PPS System
  • ProtoGen Sling
  • Uphold Vaginal Support System

Many patients have been injured by transvaginal mesh products and several have died due to the devices.  Some of the Boston Scientific transvaginal mesh products have been recalled, including the ProtoGen in 1999 and the Pinnacle Pelvic Floor Repair Kit in 2011.  The FDA has also reversed a prior statement and says that transvaginal mesh products may pose greater risk to patients than traditional surgeries.

Boston Scientific faces thousands of lawsuits regarding injury caused by transvaginal mesh products.  Many of these have been consolidated into multidistrict litigation in federal court but additional local and state lawsuits are also pending.  Many more lawsuits are still expected.

Boston Scientific in the Future

Despite its advances and achievements since the 1978 founding, Boston Scientific began experiencing yearly profit loss with lagging sales and costly payouts in 2005.  In 2012, BSX was reporting a $4.1 billion loss, despite $7.2 billion in sales.

These losses have prompted in multiple reorganizations, with three restructurings occurring between 2011 and 2013 which resulted in a loss of up to 3,500 jobs worldwide.  BSX’s financial outlook has improved somewhat with no total loss shown in the first half of 2014 and projected 2014 revenue of $7.4 billion.

One patient has been awarded $73 million in a transvaginal mesh lawsuit against Boston Scientific but most of the lawsuits have yet been settled and many more are expected.

View Sources

  1. AP, (24 October 2013), Boston Scientific to cut up to 1,500 jobs. Yahoo News, Accessed on 17 September 2014 http://news.yahoo.com/boston-scientific-cut-1-500-jobs-124320364–finance.html
  2. Boston Scientific (2014) Boston Scientific: History, Accessed on 17 September 2014 http://www.bostonscientific.com/en-US/about-us.html
  3. BusinessWire, (11 September 2014), Dallas Jury Awards Transvaginal Mesh Patient $73 Million in Boston Scientific Lawsuit, MarketWatch, Accessed on 17 September 2014 http://www.marketwatch.com/story/dallas-jury-awards-transvaginal-mesh-patient-73-million-in-boston-scientific-lawsuit-baron-and-budd-reports-2014-09-11
  4. Department of Justice, (17 October 2013), Boston Scientific and Subsidiaries to Pay $30 Million for Guidant’s Sale of Defective Heart Devices for Use in Medicare Patients, Office of Public Affairs, United States Department of Justice, Accessed on 17 September 2014 http://www.justice.gov/opa/pr/2013/October/13-civ-1107.html
  5. Gelles, D., (28 July 2014), Longtime BSX-J&J feud heading to trial, Boston Globe, Accessed on 17 September 2014 http://www.bostonglobe.com/business/2014/07/27/lawsuit-between-johnson-johnson-and-boston-scientific-moving-trial/3MxZMT3YMSLNEO1ENxbGtI/story.html
  6. Henson, S., (26 September 2006), J&J Sues Abbott, Boston Scientific For Over $5.5B, Law360, Accessed on 17 September 2014 http://www.law360.com/articles/10810/j-j-sues-abbott-boston-scientific-for-over-5-5b
  7. Hollmer, M., (23 October 2013), Boston Scientific to slash up to 1,500 more jobs even as Q3 numbers improve, Fierce Medical Devices, Accessed on 17 September 2014 http://www.fiercemedicaldevices.com/story/boston-scientific-slash-least-1100-more-jobs-q3-numbers-out-thursday/2013-10-23?utm_medium=nl&utm_source=internal
  8. McQuillen, W., et al, (01 February 2010), Boston Scientific to Pay J&J $1.7 Billion on Patents Bloomberg, Accessed on 17 September 2014 http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aRlC00dgxGKw
  9. MassDevice, (26 August 2011). Recall Roundup: Boston Scientific’s Transvaginal mesh, Varian’s August recall spree. Mass Device, Accessed on 17 September 2014 http://www.massdevice.com/news/recall-roundup-boston-scientifics-transvaginal-mesh-varians-august-recall-spree
  10. NYSE (17 September 2014) BSC Financials, Google Finance, Accessed on 17 September 2014 https://www.google.com/finance?q=NYSE%3ABSX&fstype=ii&ei=O9UZVMONOurnigLRrYHoDw
  11. Seiffert, D., (15 March 2013), Boston Scientific hit with suit claiming employee breach of contract, BioFlash, Accessed on 17 September 2014 http://www.bizjournals.com/boston/blog/bioflash/2013/03/boston-scientific-hit-with-suit.html?page=all
  12. US Judicial Panel, (15 August 2013)m Transvaginal Mesh Liability Litigation, Accessed on 17 September 2014 http://www.jpml.uscourts.gov/sites/jpml/files/MDL-2545-Initial_Transfer-05-14.pdf
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