Conspiracy counts are frequently added to charges for the underlying “substantive” offense, just in case the jury concludes that the crime was never in fact accomplished despite the best intentions of the defendants. The appellate court here, however, was not disturbed by the mere piling on of a conspiracy count against the surgeons; courts have long tolerated that practice despite its being much criticized by legal scholars. But the judges did express astonishment at the government’s evidence, presented to the jury, in support of the conspiracy charge. Put simply, the prosecutors tried to prove that the two physicians, who were, after all, partners in a medical-surgical practice, plotted (“conspired”) together to commit the crime of submitting false invoices simply by virtue of the fact that they practiced medicine together. It was the astonishing circularity of this reasoning that struck the court as not only odd, but unacceptable as a basis for criminal liability, even for a crime as amorphous as conspiracy. Such a legal theory could turn quite ordinary daily activities of two partners into a criminal conspiratorial enterprise.
However, the ending of the case was not entirely a happy one. Dr. Avery was acquitted on all counts, but one of the counts against Dr. Migliaccio survived. The conviction on this lone count was reversed, but the government was given an opportunity to retry Dr. Migliaccio if it wished. Every other charge in the case was thrown out with no opportunity for retrial.
This one count against Dr. Migliaccio demonstrates another danger in these kinds of cases—the ability of the government to convince its witnesses to testify against a defendant even where that testimony, and the reasons for which it is offered, are very suspect. Here, the government presented one witness, a patient, who testified at trial, in contrast to all of the other patient-witnesses, that Dr. Migliaccio “told her to lie to the hospital staff about the nature of her surgeries.”45 The court expressed its skepticism concerning the truthfulness of this patient’s testimony. The judges questioned how and why Dr. Migliaccio would advise the patient to “keep secret the nature of procedures to which other hospital staff were necessarily witnesses.” This “remains a mystery,” the judges wrote with evident sarcasm. The judges further noted that the witness testified to some conversations with the doctor, and then denied those very conversations took place.
In what was obviously a painful move by the appeals panel, the judges noted that their job was not to re-make nor second-guess the “credibility judgments” made by the jury, but rather to rule only on legal mistakes made by the trial judge. Since this witness made the claim—even if she later contradicted herself, and even if her testimony seemed wildly unlikely—that Dr. Migliaccio told her that he would lie and asked her to go along with the lie, it was a sufficient basis on which to retry the doctor for fraud, notwithstanding the ambiguity of the underlying regulations. And so, on this slim reed, Dr. Migliaccio could be subjected to another trial on this one charge, although next time around the trial judge would have to instruct the jury on the issue of good faith in the context of vague regulations. That would likely lead to acquittal, but only after an enormous waste of time and resources, not to mention aggravation for Dr. Migliaccio.
One of the greatest ironies of the outcome of this case was the fact that, prior to trial, the prosecutors tried to make a deal with Dr. Migliaccio to testify against co-defendant Dr. Avery in exchange for immunity. Dr. Migliaccio refused to betray his partner and instead joined him in the defendants’ dock at the trial. It turned out that the defendant to whom the government offered immunity in exchange for singing (presumably finding him the less culpable of the two) was the one whose conviction, rather than being tossed out entirely, got reversed but remanded for a new trial. Such are the messy outcomes when the feds prosecute on the basis of such vague statutes. In order to obtain convictions, they have to convince patients to betray their physicians and physicians to betray their partners—even in a case where an objective review strongly suggests that no crime was committed at all.
In the end, however, the government decided not to retry Dr. Migliaccio. Perhaps the prosecutors read the Court of Appeals’ opinion with sufficient care and discerned the judges’ unhappiness with the prosecution in general, and in particular with the dubious testimony of the one patient who accused the surgeon of urging her to join him in lying to the government. The government finally called it quits and both physicians returned to the practice of medicine.46 Tragically for the medical profession, and for the patients who depend on the sound judgment of good doctors, the ending was unusually satisfactory.
CHAPTER THREE
The Unhealthy Pursuit of Medical Device and Drug Companies
For many Americans, the Internal Revenue Code is the most incomprehensible federal thicket they will ever have to wade through. However, as anyone in the business of manufacturing, testing, and marketing pharmaceuticals and medical devices can attest, divining the dictates of the Food, Drug, and Cosmetics Act1 (FDCA) and its attendant regulations runs a close second. Within that world, the saga of Lee Leichter stands out for its absurdity, pain, and duration.
Based on a chain of events involving the testing and sale of medical devices for clearing clogged arteries, the government managed to charge 392 separate federal felony counts, including conspiracy to defraud the federal government, racketeering, mail fraud, and false statements made to the U.S. Food and Drug Administration (FDA). The experience proved devastating to Leichter’s personal and professional life, along with those of his co-defendants. Only a steel will, fortified by Leichter’s deeply held (and legally correct) belief that he had committed no crime, enabled him to survive and eventually rebuild his life.
The legal team defending Leichter (on which I served along with my then-law partner Andrew Good and associate Philip Cormier) never had any doubt that his conduct conformed to a reasonable interpretation of the 1976 amendments to the FDCA, known as the Medical Device Amendments2 (MDA). Nor did we seriously doubt that he acted entirely in good faith, which made the slow speed at which the wheels of justice churned in his case all the more frustrating. A Boston grand jury investigation commenced in 1990. An indictment followed in 1993. A 27-day jury trial concluded with a conviction on August 24, 1995. Then reversal on appeal came in March 2001. So it was that ultimate resolution of the case, on remarkably favorable terms, occurred after eight years of life-twisting turmoil for Leichter.
Leichter, who was indicted along with several other executives,3 was head of regulatory affairs for United States Catheter and Instrument, Inc. (USCI), a division of New York Stock Exchange-listed C. R. Bard, Inc. He was not a lawyer, but he invested considerable time and energy in acquiring reasonable mastery of the enormously complex FDA regulations. The regulations govern the terms and conditions under which medical devices could be manufactured and sold to the medical profession for ultimate use on patients. In his final year of employment, before he was fired as a result of the federal investigation, he earned some $72,000 per year (not the princely sum paid to high-level executives) plus a modest bonus. The bonus was an indication that, until the investigation, the company was pleased with Leichter’s work. He had a sense of deep devotion to his craft as well as competent knowledge of the letter of the law. Cohorts in his division often joked about how he would walk around with a set of the all but impenetrable regulations in hand, consulting the well-thumbed volume whenever a question arose about the FDA’s reporting and testing requirements.
After Leichter was fired in 1990, he lived off his savings to support his wife and two school-aged children. He found it impossible to find alternative employment in the Boston area, where he and his family resided and local press coverage of the regionally based case was intense. He eventually moved to Florida where he found a job that paid significantly less. When the long investigation finally resulted in the October 1993 indictment, he was fired once again, but this time he was unable to find a job anywhere. (Indictments of New York Stock Exchange-listed corporations are, after all, national and not merely local news.) He
started to travel around the country as a commission salesman of medical products, which proved so unsuccessful that the family had to sell their home. In the end, the extraordinary pressures of the case destroyed his marriage, which ended in divorce. Before it was over, Leichter had lived under strict bail conditions for a period of nearly eight years, five of those as a felon before that conviction was finally vacated by an appellate court. In a triumph of human resilience, he later remarried and assisted in putting the children from his first marriage through school.
What crime, sin, or both caused such enormous upset to this man’s life and family?
The Medical Device Amendments (MDA) were aimed at providing reasonable assurance that medical devices, before being distributed and sold, were “safe and effective.” The heart catheter devices manufactured by USCI, which provided the basis for the indictment of Leichter and the others (both higher and lower than he in the corporate pecking order), were “Class III” medical devices, meaning that they were the most inherently risky and hence the most heavily regulated.4
Heart catheters, which come in a wide variety of models, are devices for clearing clogged coronary arteries of plaque deposits that cause them to stiffen. When the stiffening process is sufficiently advanced, the arterial deposits block the flow of blood, resulting in potentially fatal heart attacks. This clearing procedure, known as “angioplasty,” is often used as a less-invasive alternative to coronary bypass surgery. To perform an angioplasty, the interventional cardiologist inserts the catheter into the artery, “fishes” it inside the blood vessel to the site of the blockage, and inflates a “balloon” with liquid pumped through the catheter to push the plaque against the artery walls, thereby easing the flow of blood through the artery. The balloon is then deflated and the catheter withdrawn.
USCI’s catheters were on the cutting edge of technology, but angioplasty nonetheless came with some risks to the patient. One misstep could lead to serious injury or death, either during or after the procedure. These risks, however, were viewed by cardiologists as less severe than invasive coronary bypass surgery. In many instances, doing nothing for such patients was by far the most dangerous alternative.
Before marketing Class III medical devices such as USCI’s catheters, a device manufacturer has to submit to the FDA a “pre-market approval” (PMA) application. The information in the PMA application must assure the FDA that the device is both “safe” and “effective.”5 Along the way, as the product is perfected with an eye toward eventual marketing, or even after marketing, if there are any substantial changes that affect the safety and effectiveness of the device, the manufacturer is required to obtain approval for such modifications by filing a PMA Supplement. In this way, the FDA is kept abreast of the product’s progress through development and then during use in the market. The FDA has the power at any time to insist on changes to the product or to pull the product off the market for reasons of public safety.
These twinned concepts—safety and effectiveness—are central to the medical device regulatory scheme (as well as to pharmaceutical regs). By law, the FDA must recognize that no drug or medical device can be 100 percent safe or always effective. Rather, the agency’s decision whether to authorize a manufacturer to sell a regulated device is to be made after weighing several factors. Those factors include 1) an assessment of the category of patients for whom the device is intended (for example, will the patients deteriorate or die without intervention?); 2) the conditions under which the device will be used and the instructions for use recommended by the manufacturer in the label contained in the packaging; and 3) a weighing of the probable benefits to health from use of the device, against any probable risk of injury or illness from such use. The FDA’s regulations summarize these factors in rather inelegant prose:There is reasonable assurance that a device is safe when it can be determined, based upon valid scientific evidence, that the probable benefits to health from use of the device for its intended uses and conditions of use, when accompanied by adequate directions and warnings against unsafe use, outweigh any probable risks.6
Thus, central to the FDCA regulations is the realization that no medical device can be 100 percent safe or effective. The goal of the manufacturers and the regulators is to balance “safety” and “effectiveness” in such a way that risks taken by physicians for their patients are judicious ones. In the end, after FDA review and approval of a PMA or a PMA Supplement, a device may be released to the market, where, hopefully, prudent physician judgment would dictate when it should be used. As we saw with pain specialists in the previous chapter, this balancing act often entails as much art as science, weighing risk and predicting success.
There are also conditions under which a medical device can be pulled from the market after it’s been released. It is not unheard of for manufacturers voluntarily to recall a device, when experience in actual use demonstrates unforeseen problems that throw into question the balance of risk-versus-reward that allowed the initial release of the product. Nor is it highly unusual for the FDA to order the recall of a device that proves more troublesome than predicted, when the manufacturer will not issue a voluntary recall.7
Given the difficult judgments that have to be made at every stage of the manufacture, testing, and release of a sophisticated medical device, the FDA (in conjunction with the Department of Justice, which prosecutes violations of the FDCA) is supposed to reserve criminal prosecution for the clearest, most egregious and intentional evasions. That is, criminal prosecutions should become an option only when it truly can be said that the manufacturer deliberately fooled the FDA into authorizing the release of a device that the company knew, from undisclosed test results, posed a substantial risk to the public without an adequate counter-balancing chance of improving the health of the patient.
Lesser violations are supposed to be dealt with by admonitions, civil fines, retraction of approvals, and other sanctions that can be devastating to a manufacturer but which stop short of criminal prosecution of the company, its executives, and its employees. Errors of judgment or of supervisory duty, not accompanied by culpable criminal intent, might even justify a so-called “absolute liability misdemeanor” charge, but not a felony one. This, in any event, is the theory, but it is not always the practice.
When USCI released various models of heart catheters in the late-1980s, the company encountered an assortment of product defects and other physical problems with its catheters. In some cases, the wire tip of the catheter broke off during surgery. In others, balloons that had been inflated inside the artery during angioplasty failed to deflate, making it difficult to remove the device from the patient’s artery. The FDA lodged a series of complaints against USCI and its executives and employees, claiming that they promoted uses of the product beyond the approved use set forth on the labeling; that they conducted field testing without FDA approval; that they made design and other modifications to the devices without obtaining FDA approval by the submission of a PMA Supplement; that they failed to do adequate testing when required; and that they moved the manufacturing site for one product without FDA notification or approval. The company offered a list of responses and defenses as lengthy as the list of FDA complaints, but in the end, when facing a potentially ruinous indictment, the company made a plea deal and agreed to pay a very substantial fine.8 By refusing to defend itself, USCI also averted a penalty that is the equivalent of capital punishment for a company in the health care industry—a “debarment” order disqualifying the company from selling its products to government-funded health programs and institutions. Because virtually all health programs and institutions involve some federal funds, either through the Medicare and Medicaid programs or others, no medical device manufacturer can survive if debarred. Meanwhile, the individuals involved, who faced prison sentences and not mere fines, proceeded to trial.
The prosecution charged that the defendants had failed to seek PMA Supplement approval for modifications to the design and manufacture of certain catheters, in respo
nse to problems experienced by doctors, before distributing the modified catheters to the market. The criminal charges boiled down to claiming that the company had deceived the FDA to avoid the agency’s taking the catheters off the market.
The FDA requires the manufacturer to include a sheet outlining “instructions for use” (frequently referred to as the “label”) with each unit sold. In deciding what language to approve for the label, the FDA relies in large measure on test data supplied by the manufacturer. That data, in turn, derives from the laboratory and field testing conducted by the manufacturer and reported to the FDA. Physicians are supposed to read the label with care, so that they understand such matters as a device’s demonstrated efficacy for certain conditions for which the device has been tested and approved, side effects, and method of use.
The individual USCI defendants had various explanations for why the devices experienced failures out in the field both during the testing period and after the release of the product. For example, some surgeons who used the catheter model where the wire tip broke off had failed to follow the instructions for use, which prescribed that the device be rotated a maximum of 360 degrees as the surgeon steered it through the patient’s artery to the area of the blockage. Similarly, the balloon deflation problems stemmed from doctors’ failure to properly prepare the device before angioplasty procedures, as required by the instructions.
It was reasonable, argued the defendants, to inquire of physicians whether a mishap had occurred while the product was being used properly or improperly, before deciding whether to report the mishap and corrective actions to the FDA. In other words, they believed they did not have to report failures to the FDA when those failures were caused by doctors’ misuse of the products, rather than by design or manufacturing flaws in the products. The government disagreed and took the position that adverse consequences in the field, as well as the company’s efforts to correct the problem, needed to be reported even if the problems occurred only when the device was misused.
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