On March 1, the Department of Justice (DOJ) charged Olympus Corp. with paying millions of dollars in kickbacks to hospitals and doctors to buy its products. The company, which owns 85% of the U.S. endoscope market, has agreed to pay $646 million total to resolve the criminal charges and civil charges brought against it. The Department of Justice says that Olympus’ U.S. division made more than $600 million in sales and $230 million in profits with the kickback scheme.
$22.8 million of the sum is being paid by Olympus’s Latin American division to resolve a separate criminal charge after paying providers at government-owned facilities to buy Olympus products.
“For years, Olympus Corporation of the Americas and Olympus Latin America dropped the compliance ball and failed to have in place policies and practices that would have prevented the substantial kickbacks and bribes they paid,” said U.S. Attorney Paul Fishman in a statement. “It is appropriate that they be punished for that. At the same time, the deferred prosecution agreement takes into account the companies’ cooperation and commitment to fully functional corporate compliance.”
Duodenoscopes received a lot of publicity in 2015, most of it bad. The final straw was when a Senate committee report linked defective scope designs to 25 infection outbreaks since 2012, 19 of which involved drug-resistant superbugs.
The Food and Drug Administration (FDA) took the brunt of the blame in the Senate report for its handling of the issue. The reports show that while the FDA was aware of the potential risks of dirty scopes, it didn’t warn the public until after a 17-month investigation. By the time the FDA warning was released, there were seven more scope-caused outbreaks, with 68 patients contracting antibiotic-resistant infections.
The report dragged the issue into the public eye and now Democrats and Republicans are both condemning the FDA’s handling of the situation. The Washington Post reports that while both sides agree changes need to be made, they disagree over what needs to be done.
Democrats argue that implementing a bar code system for medical devices would allow hospitals to track what devices are linked to infections or other issues. The Washington Post reports that the bar code program is already being phased in and will cost around $250 million.
Republicans argue that instead of a new system the FDA should simply use the power it already has, noting that the agency already has the (often unused) power to impose civil and criminal penalties against manufacturers for not reporting injuries or deaths.
Olympus Corp., the biggest seller of duodenoscopes in the nation, announced a recall of all its scopes on January 15. The recall was issued a day after a Senate committee report linked Olympus products to 142 antibiotic-resistant infection (ARI) cases.
Duodenoscopes are flexible cameras that are inserted into a patient’s mouth or digestive tract to diagnose cancers, and are used in over 500,000 procedures a year. Recent investigations found that a flaw in the scope’s design made it near impossible to fully disinfect, exposing patients to ARIs and resulting in 25 outbreaks in three years and four countries.
Olympus is the largest of the three companies listed in the Senate Committee on Health, Education, Labor, and Pensions report, controlling 85% of the American duodenoscope market. Olympus voluntarily issued the recall after the Food and Drug Administration (FDA) cleared the company’s new safety modifications to its TJF-Q180V model duodenoscope.
“We have made it a top priority to improve the safety of duodenoscopes and help protect patients from bacterial infections associated with these medical devices,” said William Maisel, MD, MPH, deputy director for science and chief scientist in the FDA’s Center for Devices and Radiological Health, in a press release. “The Olympus TJF-Q180V’s new design, as well as the new annual inspection program, is intended to reduce the risk of fluid leakage into the elevator channel, which in turn can reduce patient exposure to bacteria and other potential infections.”
Olympus says it will call every facility using the scopes and provide them with a free replacement for their recalled devices. There are around 4,400 TJF-Q180V models currently in use in America and Olympus hopes to have them all replaced or modified by August 2016. In the short term, healthcare facilities may continue to use unmodified TJF-Q180Vs, but are urged to meticulously follow the manufacturer’s reprocessing instructions.
In December, the FDA linked 45 antibiotic-resistant infections (ARI) cases to Olympus brand duodenoscopes since 2012, with the infections causing 24 illnesses and 21 deaths.
Now, a new Senate committee report has tripled the number of confirmed Olympus duodenoscopes infections to 142. Industrywide, there have been 250 patients since 2012 who’ve contracted ARIs from duodenoscopes made by various companies. Dirty scopes have been responsible for 25 patient outbreaks in 10 states and four countries. Several of the outbreaks involved Carbapenem-resistant Enterobacteriaceae infections, which can kill up to 50% of those it infects and can sometimes share its drug resistance with other bacteria.
The three companies singled out in the report were Pentax Medical, Fujifilm Medical Systems, and Olympus Corp. The Senate Health, Education, Labor, and Pensions Committee also placed blame on the FDA, saying the agency’s safety reporting system was too slow and cumbersome.