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Cordis Pleads Guilty to Defective Pacemakers; Execs Indicted

August 31, 1988

MIAMI (AP) _ The Cordis Corp. pleaded guilty in federal court Wednesday to concealing defects in thousands of heart pacemakers, and four former executives were indicted for allegedly trying to cover up the problems.

The battery-powered pacemakers are implanted beneath the skin of heart patients to regulate heartbeat by electrical impulses.

Food and Drug Administration Commissioner Frank E. Young stressed that the defective pacemakers have long since been the subject of notifications to physicians, and are no longer on the market.

″Basically the defects were the sudden loss of the ability to control the heartbeat - the pacemakers were not pacing,″ said Diane Cossin, spokeswoman for the U.S. Attorney’s office.

The problems affected ″thousands″ of pacemakers sold from 1980 to 1985, according to the indictment, which gave no precise figures.

A statement released by Assistant Attorney General John R. Bolton, head of the Justice Department’s civil division in Washington, and by interim Miami U.S. Attorney Dexter Lehtinen, called the case ″the most significant felony prosecution to date″ under the 1976 Medical Device Amendments to the FDA law.

Attorneys for Cordis, which has since sold off its pacemaker division, appeared Wednesday before U.S. District Judge Stanley Marcus to enter guilty pleas to 11 felony and 13 misdemeanor counts.

The company admitted to intentionally misleading both pacemaker buyers and the FDA by misrepresenting the quality of the devices, tens of thousands of which were sold during the period. The company agreed to pay $264,000 in fines and costs.

Cordis said it was ″motivated to settle by the compelling interests of our investors, customers and employees,″ adding that continued litigation ″would have been adverse to everyone’s best interests.″

The company emphasized the agreement only covered the company, not the officers who ran Cordis at the time.

One of the four former officers charged separately Wednesday in a 43-count indictment was Harold Hershenson of San Carlos, Calif., who was accused of criminal conspiracy, and 22 felony counts and 10 misdemeanor counts of violating the Food, Drug and Cosmetic Act.

The indictment said Hershenson, the executive vice president who ran the day-to-day operations of the company, rejected an internal memo in 1981 urging Cordis to inform doctors of the pacemaker’s problems.

Also charged in the case was John Pagones of Coral Gables, former vice president in charge of corporate product assurance, along with Dean Ciporkin of Miami and Stephen Vadas of Homestead, both of whom worked for Pagones.

Among other things, the executives were accused of doctoring documents given to the FDA to disguise the problems with the pacemakers, and making false statements.

The FDA said that most of the potentially defective pacemakers were not removed but are being monitored by doctors. Some patients highly dependent on the devices have had them removed by surgery, however.

The individuals have not yet appeared in court.