Pentax Medical Company agreed on April 7 to pay $43 million to resolve criminal charges that it distributed misbranded medical devices in interstate commerce in violation of the Federal Food, Drug, and Cosmetic Act (FDCA). The charges brought by the U.S. Department of Justice related to the company’s shipment of four types of endoscopes for 18 months without Food and Drug Administration-cleared instructions for use, as well as the company’s failure to file timely reports of two infections associated with its endoscopes.
The criminal complaint alleged and Pentax admitted that it made a deliberate business decision not to use revised FDA-cleared instructions for cleaning its endoscopes because Pentax feared the new instructions would cause the company to lose business. Pentax agreed with the FDA in 2014 that it would revise existing cleaning instructions for four types of endoscopes and include additional cleaning steps. The FDA cleared the revised cleaning instructions in April 2014, and Pentax was required to include the revised cleaning instructions when it shipped those four endoscopes.
For the next 18 months, Pentax shipped the four types of endoscopes with the old instructions for use rather than with the new FDA-cleared cleaning instructions. Internal emails indicated that Pentax decided not to use the enhanced cleaning instructions because they required customers to spend more time cleaning the endoscopes. One internal email warned that the increase of cleaning time from five minutes to 25 minutes would be “catastrophic,” and another predicted that customers “will be very upset and could switch away from Pentax because of the extra time, manpower, and cost to perform the new protocol.”
Pentax started including the FDA-cleared instructions for two of the four types of endoscopes and newly validated cleaning instructions for the other two types of endoscopes in September 2015. Pentax made $18 million in gross profits from selling the four types of endoscopes during this 18-month period.
Pentax was also charged with and admitted to failing to file timely adverse event reports of two infection incidents associated with its endoscope, acknowledging that its employees did not understand the reporting requirements.
Scope of Settlement
In addition to the monetary settlement, Pentax entered into a three-year Deferred Prosecution Agreement (DPA) in which it agreed, among other actions, to conduct a thorough audit of its current instructions for use for endoscopic devices and its adverse event reporting procedures to determine their compliance with FDA requirements, and to report the results to the FDA in writing. It has also agreed to enhance its compliance training and maintain an effective compliance program. Pentax’s president and the president of Hoya Corporation, its parent company, must annually certify that Pentax took the compliance measures required by the DPA, and Hoya’s board of directors must certify annually that Pentax’s compliance program is effective.