Medical-device maker Boston Scientific Corp. said it will pay $296 million to settle a Justice Department investigation into the company's Guidant unit. The company also said it will take a charge of $294 million in the third quarter.
The investigation involved product advisories issued by Guidant in 2005, a year before Boston Scientific paid $27 billion for the heart-device maker. Throughout 2007, Boston Scientific agreed to various settlements over heart patients' legal claims that Guidant knowingly sold defibrillators with potentially life-threatening defects over a three-year period. The company was also criticized for taking too long to notify doctors, patients and regulators about potential problems.
Under the current deal, Guidant will plead to two misdemeanor charges related to failure to include information in reports to the U.S. Food and Drug Administration.
Natick, Mass.-based Boston Scientific updated its third-quarter profit results to reflect the charge. It is now reporting a third-quarter loss of $94 million, or 6 cents per share, instead of a $250 million, or 13 cents per share profit.