NEW YORK – The US Department of Justice on Thursday said that Magellan Diagnostics has been ordered by a federal court to pay $42 million on charges that the company concealed malfunctions in instruments that it sold for measuring lead levels in blood. The Billerica, Massachusetts-based firm had agreed this spring to plead guilty to charges of introducing a misbranded medical device into interstate commerce and pay a $21.8 million fine, $10.9 million in forfeitures, and $9.3 million to compensate victims of the fraud. Prosecutors said that Magellan had concealed a serious flaw in its LeadCare Ultra and LeadCare II instruments that are designed to detect elevated lead levels in blood and aid the diagnosis of lead poisoning in children and adults.
"By deliberately concealing and consistently misleading consumers and the FDA about device malfunctions, Magellan acted with gross disregard for its responsibility to comply with FDA requirements and put patients at risk," Fernando McMillian, special agent in charge of the US Food and Drug Administration Office of Criminal Investigations, said in a statement.
Prosecutors said that Magellan officials learned in 2013 that the company's LeadCare Ultra and LeadCare II instruments could deliver incorrect, low lead test results, yet the firm didn't notify the FDA about the problems with LeadCare Ultra until 2015 and LeadCare II in 2016. Meanwhile, the firm had changed its instructions without notifying the agency to advise customers to run the tests 24 hours after collecting blood samples.
The FDA issued a recall in 2017 and later expanded it to cover additional testing systems. The agency announced later that year that it had found numerous violations of federal law. Last year, the DOJ charged three former executives of conspiracy to commit fraud in connection with the tests.