Three former executives who worked at a medical device company were arrested after authorities say they misled customers and the government about a malfunction that caused devices used to test for lead in thousands of children and other patients to give “falsely low” results.
The Department of Justice announced the arrests of Amy Winslow, 51, of Needham Heights, Mass., Hossein Maleknia, 64, of Bonita Springs, Fla., and Reba Daoust, 66, of Amesbury, Mass. on Wednesday – all of whom worked at Magellan Diagnostics, Inc., a medical device company headquartered in Billerica.
Federal authorities said the three repeatedly misled customers and the Food and Drug Administration about a malfunction that affected Magellan’s LeadCare devices, which later led to an extensive recall notice being issued.
The devices, including LeadCare Ultra, LeadCare II and LeadCare Plus, are used to detect lead levels and lead poisoning in blood samples from children and adults using either venous or fingerstick samples.
According to the DoJ, LeadCare II tests alone accounted for “more than half of all blood lead tests conducted in the United States from 2013 through 2017” via fingerstick samples, whereas LeadCare Plus and LeadCare Ultra tests were mainly conducted via venous samples.
In a news release, the DoJ said the company’s former CEO (Winslow), former COO (Maleknia) and former Director of Quality Assurance and Regulatory Affairs (Daoust) “repeatedly misled Magellan customers and the FDA” in regards to a serious malfunction that was discovered internally in 2013.
The malfunction would cause LeadCare Ultra devices to give inaccurate lead test results, according to the DoJ. Specifically, the results from lead tests would be falsely low.
Officials claim the three former executives appeared to first learn about the malfunction “in or around June 2013,” during the FDA clearance process. The devices were then released in December that year, without any authorities or customers being notified until customers independently discovered the malfunction themselves and filed complaints about inaccurate results.
“It is further alleged that the defendants drafted and caused Magellan to provide false and misleading statements to customers that they ‘recently identified cases’ of the malfunction and they did not observe the malfunction ‘in our clinical trials prior to the product release,'” the DoJ stated. “According to court documents, the defendants, in fact, had known about the malfunction for over a year, including before the product release.”
Testing conducted by Magellan in 2013 also showed the same malfunction appeared in the company’s LeadCare II device, described as its “highest-revenue product,” according to authorities.
However, with both defendants Winslow and Maleknia in the process of preparing the company for sale at the time, officials allege Winslow told an employee to stop studying the issue in order to maintain “plausible deniability.”
Following the company’s acquirement by Meridian Bioscience, Inc. for $66 million in 2016, with Winslow receiving a bonus of approximately $2 million and Maleknia receiving $448,000, the defendants notified both customers and the FDA about the LeadCare II malfunction.
However, officials later found the company’s report made false and misleading statements and concealed details about the Magellan’s discovery of the issue to the FDA.
Meanwhile, investigators also found an FDA report for LeadCare Ultra was only filed after an outside consultant told the company that if Magellan did not notify regulators, the consultant would, according to the DoJ.
When contacted in 2017 by the FDA to ask when the company first discovered the malfunction, authorities alleged that, at the instruction of Daoust and Maleknia, a company representative falsely told officials the issue was discovered after customer complaints were received in late 2014.
Authorities said Winslow also caused Magellan to send a false timeline to the FDA that omitted the company’s internal 2013 studies.
The FDA later found Magellan’s LeadCare Devices could not accurately test venous samples, leading to a recall of all LeadCare Devices using venous samples. A warning to the public was also issued, informing customers not to use LeadCare Ultra, LeadCare II and LeadCare Plus for venous blood samples.
“According to the CDC, there is no safe level of lead in the blood. Additionally, young children and pregnant mothers from low-income households living in public housing are the most vulnerable to lead exposure. We allege that these defendants deceived customers and the FDA about the reliability of medical tests that detected lead levels. By doing so, we assert that they endangered the health and lives of incredibly vulnerable victims,” United States Attorney Rachael S. Rollins said. “This office, along with our other law enforcement partners, will vigorously investigate and prosecute those who put corporate profits before patient health. Here, we allege the personal gain is at the expense of poor people, children, and individuals who are pregnant. We pledge to advocate on these victims’ behalf and hold bad corporate actors accountable.”
Winslow, Maleknia, and Daoust have since been charged with:
- Conspiracy to commit wire fraud
- Wire fraud
- Conspiracy to defraud an agency of the United States
- Introduction of misbranded medical devices into interstate commerce with intent to defraud and mislead
Winslow and Daoust appeared in federal court in Boston on Wednesday. Maleknia was also scheduled to appear in federal court in Tampa later the same day.
Winslow said nothing as she left the federal courthouse in Boston. In a statement though, her attorney called the indictment “disappointing.”
“Amy left Magellan amicably 5 years ago, and was a thoughtful, compassionate, and effective leader there through difficult times for the company,” Winslow’s attorney said. “…We look forward to Amy having her day in court, and we are confident she will be vindicated.”
Meridian Bioscience also released a statement reacting to the news.
“Meridian and Magellan have cooperated extensively with federal authorities,” the statement said. “…All the company’s current products from the LeadCare line are FDA cleared and will remain available for clinical use.”
In their news release, the DoJ informed members of the public that if they or a family member believe they received an inaccurate blood lead test result from a LeadCare device between 2013-2017, they can complete a questionnaire on the FBI’s website found here.
Both Winslow and Daoust are due back in court for a status conference in late May.
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