Olympus fined $85 million in duodenoscope case; former exec faces prison

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Olympus (TYO:7733) and a former senior executive in Japan have pleaded guilty in Newark, N.J., to failing to file required adverse event reports involving infections connected to duodenoscopes, and to continuing to sell the devices in the United States despite those failures, the Justice Department announced.

Tokyo-based Olympus and Hisao Yabe, 62, both entered guilty pleas before U.S. District Court Judge Stanley Chesler in Newark Federal Court: Olympus to three counts, and Yabe to one count, of distributing misbranded medical devices in interstate commerce in violation of the Federal Food, Drug, and Cosmetic Act (FDCA).

Olympus has already been fined hundreds of millions of dollars over its duodenoscopes, which are difficult to clean and were implicated in deadly superbug infections in the U.S. and Europe.

Chesler also fined Olympus $80 million and ordered $5 million in criminal forfeiture, consistent with a plea agreement between Olympus and the justice department. Olympus must also abide by an agreement with the justice department requiring Olympus to enact extensive compliance reforms. Yabe is scheduled to be sentenced by Chesler on March 27, 2019. Yabe faces a maximum potential penalty of a year in prison and a $100,000 fine, or twice the gain or loss from the offense.

Olympus admitted that it failed to file adverse event reports with the FDA  in 2012 and 2013 relating to three separate events involving infections in Europe connected to Olympus’s TJF-Q180V duodenoscope (Q180V): the infection of approximately 22 patients with Pseudomonas aeruginosa at the Erasmus Medical Center in the Netherlands in early 2012; the infection of three patients with Escherichia coli at Clinique de Bercy in France in November 2012; and the infection of five patients with Pseudomonas aeruginosa at Kremlin Bicetre in France in July 2012.

Yabe admitted personal responsibility for failing to file the necessary information with FDA relating to the Erasmus Medical Center infections, according to a statement from the court. At the time, Yabe was Olympus’s quality and environment division manager – the company’s top regulatory official, whose responsibilities included adverse event reporting in the United States.

“Medical devices, such as the Olympus duodenoscope that is used in 500,000 procedures per year in the United States, can extend and improve the quality of life for many people,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division, in the statement. “But when a device manufacturer becomes aware of risks that could lead to illness, injury, or death, there is a statutory obligation to report that information to the FDA in a timely manner. By failing to do so, Olympus and Mr. Yabe put patients’ health at risk.”

“Olympus and Yabe failed to file important FDA reports regarding adverse events,” said Rachael Honig,  U.S. attorney for the District of New Jersey. “It is especially troubling that they remained quiet when they received additional information from an independent expert questioning the safety of Olympus’ device. Patient safety must always be a paramount concern for medical device companies, and these defendants simply failed to treat that concern with the gravity it deserves.”

“Medical device adverse event reporting requirements are designed to protect Americans by providing FDA with a tool to detect potential safety issues,” said FDA Commissioner Scott Gottlieb, M.D., in a separate statement. “When device manufacturers fail to report adverse events, unsuspecting patients are placed at risk.”

Although Olympus acknowledged that it failed to comply with the federal reporting requirements, the company said the investigation did not identify any direct harm to patients as a result of the disclosure failures. The settlement does not affect the availability of Olympus products and services worldwide.

“Olympus deeply regrets its failure to file and supplement the MDRs identified in the plea agreement and accepts full responsibility for these failures,” said Olympus president Hiroyuki Sasa in a separate statement.

Olympus admitted that it failed to make the required initial MDR filing regarding the Kremlin Bicetre infections, and failed to file required supplemental MDRs relating to the Erasmus Medical Center and Clinique de Bercy infections, for which Olympus had filed initial MDRs. Under the FDCA, devices for which required MDRs and supplemental MDRs have not been filed are deemed misbranded, and it is a crime to ship such devices in interstate commerce. Between August 2012 and October 2014, Olympus shipped hundreds of misbranded duodenoscopes in the United States, generating approximately $40 million in revenue and approximately $33 million in total gross profit. Olympus’s payment of $85 million is more than 2½ times Olympus’s total profit from sales of the misbranded duodenoscopes.

Yabe admitted that he was aware of Olympus’s obligation to file supplemental MDRs and was involved in Olympus’s failure to file a supplemental MDR regarding the Erasmus Medical Center infections and a report Olympus received prepared by an independent expert of Delft University of Technology in the Netherlands. That expert report – which Olympus obtained in the summer of 2012 – noted numerous problems with the Q180V, including that the Q180V’s tip had various cracks, corners, and crevices that could harbor bacteria and could be cleaned only with great difficulty. The report recommended immediate further investigation of all such scopes, updating the cleaning instructions, and improving the quality of the seal.

As part of its plea agreement, Olympus has agreed to:

    • Retain an independent MDR expert to inspect and review Olympus’s policies and procedures to determine their compliance with the FDCA’s MDR requirements and its implementing regulations;
    • Periodic review by the MDR expert of Olympus’s continued compliance with those requirements and its implementing regulations;
    • And conduct a review and audit of the device classification and market pathway for all endoscope device types manufactured by Olympus that are intended for use in the sterile body cavity and that are currently sold in the United States. The MDR expert will report back to FDA and the justice department periodically for three years.



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Olympus wins FDA nod for Spiration bronchial valve


Olympus (TYO:7733) said yesterday that it won FDA approval for its Spiration Valve System intended to treat severe emphysema, which was designated as a breakthrough medical device.

The Spiration Valve is an umbrella shaped device intended to improve breathing by blocking airflow to diseased portions of the lung, the Tokyo-based company said. The device is placed during a bronchoscopic procedure to reduce lung volume in diseased lung sections and allow healthier tissue in the remaining portion of the lung to function better.

Approval of the device came based on the results from the Emprove clinical trial of the SVS, which demonstrated that patients treated with the system showed statistically significant and clinically meaningful improvements in lung function and quality of life as compared to the standard of care.

Results also indicated a favorable risk benefit profile and a shortened procedure time, which Olympus said may reduce the risk of adverse events. Serious adverse events noted in the study included chronic obstructive pulmonary disorder exacerbations, air leaks, pneumonia and death.

“In the patients I treated in the Emprove trial, the most important outcome was a marked reduction in shortness of breath, or dyspnea. This resulted in improved quality of life and patient satisfaction. Dyspnea is the most common symptom in patients with advanced emphysema and severe hyperinflation, and is the most refractory to medical treatment,” Dr. Gerard Criner of the Lewis Katz School of Medicine at  Temple University said in a press release.

In October, Olympus said that it launched the Endoeye Flex 3D and FlexDex needle driver laparoscopic surgical tools in the U.S.

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Olympus launches Endoeye Flex 3D, FlexDex needle driver in US


Olympus (TYO:7733) said yesterday it launched the Endoeye Flex 3D and FlexDex needle driver laparoscopic surgical tools in the U.S.

The company said that it is the exclusive distributor for DexFlex in the US, and is combining the Endoeye Flex 3D tech with FlexDex’s wristed needle-driver to improve minimal access surgery procedures. The device can be used during multiple procedure types including general and gynecological specialties.

“Olympus and FlexDex are redefining minimal access surgery in the OR. We expect this solution to offer surgeons the precision and control they desire without the burden of a complex and costly computer-aided robotic system. This will not only improve patient outcomes and satisfaction but also help healthcare institutions provide true value-based care,” Olympus prez Todd Usen said in a prepared statement.

Olympus said that 3D imaging tech, combined with FlexDex’s device, helps simplify suturing in difficult-to-reach areas by translating motions from the surgeon’s hand, wrist and arm into corresponding movements with the device.

“Through our Olympus partnership, FlexDex is going to disrupt the paradigm where surgeons and hospitals had to choose between high cost/high function and low cost/low function,” FlexDex CEO Dr. James Geiger said in a press release.

In June, Olympus said that it was partnering with accelerator MedTech Innovator.

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Olympus inks co-development deal with Ai4gi for AI-supported colonoscopy solution

Olympus (TYO:7733) said today it inked a co-development deal with artificial intelligence joint venture Ai4gi which will give Olympus exclusive rights to offer Ai4gi’s AI solution designed for clinical decision support during colonoscopy screening and surveillance procedures.

Ai4gi is a joint venture between Imagia and Satis Operations, Tokyo-based Olympus said. The company added that the co-development agreement is intended to improve clinical outcomes during colonoscopy procedures, reduce costs and improve quality of life for patients.

“Ai4gi’s solutions to early colon cancer recognition are going to be a game-changer in the field of gastroenterology. These solutions are what the industry needs for more timely and more effective patient care, and Olympus is an ideal industry partner to drive clinical adoption of this technology. As doctors, we all need help to improve our practice, so why not use the best technology available?” Satis Operations CEO & Ai4gi clinical lead Dr. Michael Byrne said in a press release..

“We are excited about the potential of our clinical AI solutions to promote paradigm shifts in the standard of care for endoscopic procedures. The clinical decision support from AI may benefit patients by enabling physicians to better predict polyp histology in real-time,” Imagia CEO Frédéric Francis said in a prepared statement.

The AI-support tool from Ai4gi was developed using a large volume of unaltered endoscopic colonoscopy videos worldwide and combined with deep-learning training modules, Olympus said. The company is hopeful that the technology will improve clinician performance and help navigate new ways to treat disease.

Olympus said the co-development agreement is the first of its kind in the US market, and that it is the first time an AI proof-of-concept has been clinically demonstrated in a real-time colonoscopy screening application.

“We are thrilled to add artificial intelligence to our already powerful endoscopy portfolio which we feel is an emerging and essential core competency in this space. Our vision is to add Artificial Intelligence to our platform to improve the assessment of colon cancer screening as well as potentially other endoscopic procedures. Better visibility, along with increased efficiency, can bring us closer to our goal of improving quality of care, reducing healthcare costs and enhancing patient satisfaction,” Olympus America endoscopy division group VP Kurt Heine said in prepared remarks.

Last month, Olympus said it inked a deal with InterSystems to enhance Olympus’ Knowledge Exchange System with InterSystems HealthShare, which allows for the sharing of images taken during endoscopy procedures.

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The ‘smart pill’ market could be worth $3B by 2025 – meet the key players

The “smart pill” market is expected to nearly quadruple in value to $3 billion by 2025, according to Grand View Research. Driving this growth is an increasing demand for minimally-invasive procedures, as well as better patient monitoring capabilities.

There are a number of players in the pharmaceutical and medtech arenas looking to stake a claim to the smart pill market. The companies are segmented into two groups – those developing capsules used for endoscopy and those creating connected, swallowable drug-tracking systems.

Get the full story at our sister site, Drug Delivery Business News.

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