Magellan Diagnostics will pay $42 million for covering up testing device malfunctions

Magellan Diagnostics, Inc., a medical device company based in Billerica, Massachusetts, has agreed to plead guilty and pay $42 million to settle criminal charges related to concealing defects in its leading testing devices. The outage caused inaccurate lead test results for potentially tens of thousands of patients, including children.

The company will plead guilty to violating the Federal Food, Drug and Cosmetic Act, which could result in a fine of $21.8 million, forfeiture of $10.9 million and at least $9.3 million in damages to affected patients. In addition, Magellan entered into a deferred prosecution agreement to resolve fraud charges in connection with the conspiracy.

Magellan’s devices – LeadCare Ultra, LeadCare II and LeadCare Plus – are used to detect blood lead levels using samples from veins and fingers. LeadCare II accounted for more than half of all U.S. blood lead tests from 2013 to 2017. LeadCare Plus and LeadCare Ultra primarily tested venous samples.

Magellan admitted misleading its customers and the FDA about the malfunction of its LeadCare devices used to collect venous samples. The company discovered a problem with LeadCare Ultra during the FDA approval process in June 2013, but released the device in December 2013 without disclosing the flaw. Customers later reported inaccuracies, which Magellan falsely claimed to have only recently discovered.

Internal testing in 2013 also found a failure in LeadCare II, the company’s main revenue generator. Magellan did not inform customers or the FDA until November 2016. In 2017, when the FDA inquired about the discovery of the irregularity, a Magellan representative falsely stated that it had been detected in late 2014. Ultimately, the FDA recalled all LeadCare devices used to collect venous and issued a public warning.

The Centers for Disease Control and Prevention states that no level of lead in the blood is safe and exposure can cause irreversible health problems, especially in young children and pregnant women.

As part of the resolution, Magellan will compensate patients who have clearly suffered as a result of the incorrect action. Those who believe they received inaccurate lead test results between 2013 and 2017 can complete a questionnaire on the FBI’s website.