Boston Scientific (NYSE:BSX) stocks fell slightly in pre-market trading after being covered in a 60 Minutes episode focused on gynecological pelvic mesh implants which are the source of a massive multi-district litigation, including claims that the company knowingly purchased inauthentic Chinese plastic materials for production.
The Marlborough, Mass.-based company declined an interview with 60 Minutes, which focused on the devices and the 48,000 suits Boston Scientific faces over the allegedly harmful meshes.
Boston Scientific was quoted as having told 60 Minutes that “nearly one million women have been successfully treated […] We have extensively tested the [plastic] resin to confirm its composition, safety and performance.”
The statement won support from the American Urogynecological Society, but other expert sources interviewed by 60 Minutes had contrasting opinions.
Dr. Michael Margolis, a surgeon who has reportedly removed 350 mesh implants and has served as a witness in lawsuits against Boston Scientific, claimed that the meshes cause a chronic inflammatory reaction.
“The slings I’ve removed are substantially altered in their architecture. They are shrunk by at least 50% in width; they are encased in scar tissue. The pores here, these openings here are shrunk substantially,” Dr. Margolis said, according to 60 Minutes.
The report claims that Boston Scientific won FDA clearance for and used “Marlex” branded polypropylene, made by a subsidiary of Chevron Philips, for its meshes, but in 2004 was warned by Chevron Philips that the branded polypropylene should not be used for permanent implantation.
“I can’t, in my wildest imagination, imagine anybody that’s knowledgeable in the science of plastics ever deciding that it was appropriate to use polypropylene in the human body. It’s well known that its oxidatively unstable,” American Chemical Society fellow, plastics engineer and mesh lawsuit witness Duane Priddy said, according to 60 Minutes.
Boston Scientific was cut off from Marlex by Chevron Philips in 2005, though Boston Scientific appealed to the Texas-based company, according to the report. The medtech firm reportedly had to use the Marlex polypropylene, which it estimated it would run out of by 2012, due to it already having received FDA clearance for the specific material.
Boston Scientific appealed to other suppliers of the polypropylene, and was refused by a second supplier in 2010 based on it being used in medical devices, 60 Minutes reported. The company proceeded in an attempt to “use a middleman with ‘no direct link to BSC’,” according to the report, but were unable to find a buyer.
The company found a source in China, Emai, who had “tons of Marlex imported from Chevron Phillips in Texas,” according to the report.
In pursuit of the Marlex, an agent at Boston Scientific wrote to their superiors asking if they needed to specify that the material would be used in implantable medical devices, and was instructed to not disclose what it would be used for, for fear it “could scare them away”, 60 Minutes reported.
During the same month Boston Scientific was seeking new supplies, the FDA released a report on the meshes claiming they had received approximately 4,000 reports of “injury, death and malfunction” and complications including pain, infection, urinary problems, bleeding and organ perforation, according to the report.
Boston Scientific reportedly analyzed the Chinese source of Marlex, comparing it to authentic Marlex from Chevron Philips, and was told that the packaging and labels, including lot numbers, were fraudulent.
The company continued to investigate the plastic, analyzing 11 parameters between the authentic Marlex and the Emai-sourced Marlex, 60 Minutes reports. Only two parameters were the same, with nine reported as different, with four of those parameters reading as “very different.”
Despite these differences, Boston Scientific concluded that the two plastics were the same, according to the report.
Boston Scientific global sourcing division plastics manager Ann Charest concluded that they “believe this is the right material,” and speculated that the lack of documents were due to being imported through improper channels, and that it may have been “redistributed enough times, the original paperwork has been lost/forgotten,” 60 Minutes reports. The company proceeded to purchase a 30 year supply of the Marlex from Emai.
The news program said it hired Priddy to analyze the medtech company’s tests on the plastic after finding the test results in court documents.
“I would predict a significant difference in the antioxidant stability, or I should say the oxidation resistance of those products in the human body,” Priddy told 60 Minutes. He proceeded to confirm that the product was “inferior,” and indicated the product would only last “a few months” in the human body.
In its efforts to import the Emai-sourced plastics, Boston Scientific reportedly hid the original bags the plastics products came in over fears that “if it is caught by customs, we will be in trouble.”
“A plan to hide the bags in plain wrappers was approved in an email sent from the address of Charles Smith, a director in Boston Scientific’s urology and women’s health division,” 60 Minutes reported.
Images and details on the “overbagging” procedure were distributed to executives to approve, the report claims. The company then told the Chinese government that the plastic had been produced in China, and told US customs that the plastic was made in the US, according to the report.
In January 2016, a purported class-action racketeering lawsuit accused Boston Scientific of illegally smuggling counterfeit resin made in China to make pelvic mesh. Shortly after filing, however, a federal judge booted the lawsuit on claims that the FDA has jurisdiction over the case.
In April 2016, a federal probe into the counterfeit resin allegiations reportedly convened a grand jury in West Virginia.
The same firm that filed the the racketeering suit later asked the FDA to ban the medical device maker’s pelvic mesh products made with the allegedly impure resin.
The FDA investigated the change in plastic, but wrote that it “did not find any indication that the change in [plastic] resin led to an increase in adverse events. We have confidence in our […] findings.,” according to 60 Minutes.
In the 60 Minutes report, Priddy goes on to claim that it was “hard for me to imagine somebody looking at that data and generating an opinion that it is acceptable for use in the human body.”
Though Boston Scientific declined an interview with 60 Minutes, it stated that “any allegations continuing to question the integrity or legitimacy of our [plastic] resin are false and irresponsible.”
The news program, in an attempt to confirm whether or not the company was continuing its use of Chinese plastics, purchased 15 mesh kits and analyzed them at a plastics lab, and confirmed that all of the products matched the supposedly inauthentic Chinese plastic.
Shares in Boston Scientific fell 2% in premarket trading early today, but have recovered slightly and are down only approximately 0.1% at $29.95 as of 11:48 a.m. EDT.
In February, Boston Scientific lost another bid as looking to overturn an $18.5 million loss in a product liability suit over alleged injuries caused by its Obtryx pelvic mesh.
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