Olympus Medical Systems Corp. (Olympus) and Hisao Yabe, a former quality manager, pleaded guilty to failing to file required Medical Device (adverse event) Reports (MDRs) involving infections connected to duodenoscopes and to distributing misbranded medical devices into interstate commerce, in violation of the Food, Drug and Cosmetic Act (FDCA). Under the plea agreement, Olympus will pay $80 million in fines and $5 million in criminal forfeitures to the U.S. Department of Justice (DOJ) and implement extensive compliance reforms.
Olympus admitted that it failed to file required MDRs in 2012 and 2013 relating to three separate events involving infections in multiple patients at three locations in Europe in connection with Olympus’s TJF-Q180V duodenoscope (Q180V).
Yabe admitted personal responsibility for the failure to file the necessary information with the U.S. Food and Drug Administration (FDA) relating to the MDRs at one of the European locations. At the time, Yabe was Olympus’s manager for the Quality and Environment Division – Olympus’s top regulatory official, with responsibilities for adverse-event reporting in the United States.
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 one of the European locations, as well as a report Olympus received that had been 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 seals.
Terms of Settlement
The settlement amount includes $80 million in fines and $5 million in criminal penalties paid to DOJ.
Olympus also agreed to:
- Retain an independent MDR expert to inspect and periodically review Olympus’s policies and procedures, to determine compliance with the MDR requirements of the FDCA
- 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
- Have the president of Olympus and Olympus’s board of directors periodically conduct reviews of both Olympus’s MDR compliance measures and its classification/marketing pathway and provide certifications to the FDA and the DOJ relating to those reviews
- Inform health care providers in the United States who received Q180Vs between August 2012 and October 2014 of Olympus’s plea, and provide information to those health care providers regarding Olympus’s failure to file the required MDRs
Yabe is scheduled to be sentenced on March 27, 2019, and faces a maximum potential penalty of a year in prison and a $100,000 fine or twice the gain or loss from the offense.