The Cost of Greed in Medtech

I’ve said this before, but it bears repeating: Medical device companies are not perfect, nor should anyone expect them to be. But manufacturers in this industry especially do have a responsibility to deal with quality control problems head-on.

Yet all too often, medtech companies succumb to greed and sweep problems under the rug. I was reminded of this unfortunate tendency with the recent conclusion to the Magellan Diagnostics scandal.

The Billerica, MA-based company, owned by Cincinnati, OH-based Meridian Bioscience, agreed to plead guilty and pay $42 million to resolve criminal charges for concealing a device malfunction that produced inaccurately low lead test results for potentially tens of thousands of children and other patients. Of that $42 million, at least $9.3 million will go toward compensating patient victims.

Magellan first learned of the malfunction in its LeadCare Ultra device during the FDA clearance process in June 2013. Instead of fessing up to FDA, however, the company hid the problem and released the test to the market in December 2013. When LeadCare Ultra customers complained about inaccurate results, the company lied and said it had not observed the malfunction prior to putting the product on the market. Magellan’s testing in 2013 also indicated that the same malfunction affected the LeadCare II device, which turned out to be the company’s highest-revenue product, according to the U.S. Attorney’s Office for the District of Massachusetts. The company also lied to FDA about when the problem was first discovered.

All too often, patients end up paying the cost when medtech companies become so fixated on making a profit that they hide problems with their products. In this case, most of the patients harmed because of Magellan’s deception were young children and pregnant women, many of whom are from low-income households or older homes.

The Magellan story has major Theranos vibes.

Erika Cheung, a whistleblower in the Theranos case, believes fraud in the industry is inevitable.

“I think there will be another Theranos,” Cheung told MD+DI Editor-in-Chief Omar Ford in a 2022 interview. “I think fraud is something that is going to persist the test of time, whether we like it or not. It just seems to be the way things are. In terms of how you prevent another Theranos, I think [you must do] the due diligence, asking the big questions.”

Cheung is right, but I also think the industry at large must hold itself accountable. Because each time a medtech scandal comes to light, the reputation of the entire industry takes a hit. So, the companies that are doing things the right way need to take a stand against these bad actors, turn such stories into lessons on what not to do, and insist on putting patient health and safety above profits.