The New York Times reported today that in January 2005 Guidant drafted a letter warning doctors about a short circuiting defect in its Contak Renewal and Contak Renewal 2 defibrillators, but never sent the letters to doctors over concerns the letter would cause “undue alarm” and result in procedures to remove potentially faulty devices, and that such procedures would be associated with higher risk than simply leaving the debrillators in place. The letter and other documents were unsealed by a Texas judge overseeing a product liability lawsuit.Of course hindsight is 20/20. With what Guidant (now Boston Scientific) knows now, there is no question (at least in my mind) that failing to send the letter, and instead sending the “product update” letter, was ill-conceived. The subsequent recalls and class action lawsuits caused a reveral of fortune for Guidant, knocking billions off the price tag of its sale to Boston Scientific.
If there was indeed real concern about the risk of explantation being higher than the risk from faulty defibrillators, then that is precisely what should have been communicated. It is difficult to conceive that Guidant calculated the potential fallout from the letter and deemed it to be greater than the fallout of not disclosing the defibrillator defects. In this day and age, in which every misstep by manufacturers is magnified with crystal clarity, it is an absolute obligation to understand the impact of product liability.