Guidant Issues Recall Of Problem Defibrillators

Guidant has issued a recall of several models of defibrillators after the company admitted that the devices can potentially develop internal short circuits without warning. This voluntary move came after the company said it continued to sell the defibrillators even though flaws were detected that led to a change in manufacturing.

The Indianapolis-based company issued the recall for the Prizm 2 DR Model 1861 made before April 17, 2002 and the Contak Renewal models H135 and H155 made before August 27, 2004 because the defibrillators could fail to work during episodes of arrhythmia. In all, 29,000 devices are being recalled.

West, which said a portion of the proceeds is being deferred and contingent on Tech Group’s performance in 2005 and 2006, said the combined plastic molding business will have sales of about $180 million. Morel pointed out that West alone is expected to have sales of about $585 million this year and that Tech Group will add another $70 million to revenues.

Guidant’s decision came after it disclosed the problem in June. However, the company delayed issuing a recall immediately, even though it was aware of 25 cases of product failure, one of which resulted in the death of a 21-year-old student in March. At the urging of the FDA, the company decided to pay for the cost of the recall, which would require some of the implanted defibrillators to be replaced in patients at a cost of up to $25,000 per patient. That means the company could potentially pay up to hundreds of millions of dollars in replacement costs alone, not including expected litigation.