Guidant Recalls Hit Pacemaker Line

After recalling more than 100,000 of its implantable cardiac defibrillator (ICD) devices in June, Guidant Corp. (Indianapolis) has now issued a voluntary recall of approximately 28,000 pacemakers. In mid-July, the company notified physicians, patients, and FDA that there was a potential safety flaw in some of its pacemaker models manufactured between November 25, 1997, and October 26, 2000. The flaw was attributed to the hermetic sealing component used in the devices, which could result in higher than normal moisture content and potentially cause an abnormal pacing condition.

The pacemaker devices covered by the recall include the following nine models: Contak TR, Discovery, Discovery II, Intelis II, Meridian, Pulsar, Pulsar Max, Pulsar Max II, and Virtus Plus II. Guidant reported that these models represent “an earlier generation design” and are no longer manufactured.

FDA classified Guidant’s action as a Class I recall, the most serious type, and indicative of a “reasonable probability that the malfunctioning device will cause serious adverse health consequences or death.”

Guidant has identified 69 adverse incidents, including one death, in which the device malfunction was likely caused by deterioration of the sealing component. Of the 78,000 units distributed, 28,000 remain implanted worldwide, with 18,000 still in use in the United States. The average implant age of the remaining U.S. units is 69 months. There have been no failures reported prior to 44 months of service.

Device malfunction has typically resulted in loss of pacing output, causing fainting, or sustained maximum output, resulting in rapid arrhythmia and potential heart failure. Other adverse device behaviors are also possible and can occur without warning. Based on incident reports and statistical models, Guidant estimates that the rate of failure in the remaining active implanted devices is between 1.7 and 5.1 per thousand over the remaining lifetime of the devices.

Guidant recommends that physicians consider replacing the recalled devices for “pacemaker-dependent” patients. The company also advises patients to seek “immediate medical attention” if they experience shortness of breath, dizziness, lightheadedness, or a prolonged fast heart rate.

CDRH's Schultz: Complex, not perfect.

FDA has posted the recall notice on its Web site and, while not making a specific recommendation on whether or not patients should have a recalled device replaced, generally endorses the advisory that Guidant has issued to physicians and patients. Daniel J. Schultz, MD, director of FDA’s Center for Devices and Radiological Health, described pacemakers as “complex medical devices that can extend and improve the lives of many people who have heart rate abnormalities. However, they are not perfect and can malfunction.”

Pacemakers are generally thought to have a 7–10 year life. Many of the models being recalled are nearing or have exceeded their estimated product life and are beyond warranty coverage. However, Guidant is offering to provide a replacement device at no charge for physician-designated candidates. The company will also reimburse patients up to $2500 for medical expenses remaining after Medicare or other health-insurance coverage.

“The health and safety of patients is paramount,” stated Ronald W. Dollens, Guidant president and CEO. “Guidant has worked closely with FDA and has made the regulatory agency aware of all Guidant statements set forth in prior press releases, physician communications, and patient letters on this matter. Guidant will continue to work to meet and exceed the expectations of physicians, patients, and FDA.”

Guidant CEO Dollens: A deal in trouble?

Medtech industry and financial analysts generally agree that Guidant has handled the pacemaker recall in a more open and deliberate manner than it did with last month’s ICD recalls. Speculation about the impact of back-to-back recalls of such high-profile products in the company’s signature cardiac-rhythm management business has become less and less circumspect. The general consensus among analysts now is that the damage has been done. The question is—how much?

Some near-term recovery in the ICD product line is expected now that Guidant has identified and corrected the magnetic switch component in one of last month’s recalled ICDs—the Contak Renewal 4—which has just been approved for relaunch in the European market. Guidant also reports that it has applied for FDA approval to resume selling the device in the United States.

A great deal of attention remains focused on Guidant’s pending $25.4 billion acquisition by Johnson & Johnson Inc. (New Brunswick, NJ). J&J has publicly held fast to its previous statements that the deal is going through as planned. Nevertheless, the world’s largest medical device maker had to fend off analysts during a post-earnings-report conference call in July, as the Guidant issue was a topic that continued to loom large.

J&J’s Darretta: No timeframe.

While J&J said it is thoroughly reviewing Guidant’s current problems, CFO Robert J. Darretta hinted that there might be a delay in closing the deal. “The product notifications and product recalls which we are currently working to understand, with the full cooperation of Guidant management, is something that I really cannot speculate how long will take to resolve. Whether inside the third quarter or beyond, I’m not in a position to comment.”

Several analysts are now openly speculating that the deal is likely to be renegotiated. While Guidant reported record revenues in the second quarter, the company has lost an estimated $2 billion in value since April—largely attributed to the fallout from its handling of the ICD recall. The $25.4 billion offer from J&J—made last December—was predicated on a Guidant stock value of $76 per share. But the price of Guidant shares fell below $64 in June. While share value appears to be trending upward, Guidant is believed to have suffered some loss of physician confidence as well as market share to some of its competitors, most notably St. Jude Medical Inc. (St. Paul, MN).