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Allianz Insurance Co. v. Guidant Corp.1/28/2005
UNPUBLISHED
Defendant, Guidant Corporation (Guidant), appeals an order of the circuit court of Du Page County denying its request for a partial stay of this insurance coverage lawsuit. We affirm.
I. BACKGROUND
A. The Ancure Device and the Underlying Claims
Guidant, through its wholly owned subsidiary, Endovascular Technologies, Inc. (EVT), developed and manufactured a medical device known as the Ancure Endograft System (Ancure Device). In September 1999, the Food and Drug Administration (FDA) approved the Ancure Device for commercial sale. The Ancure Device was sold and distributed by Guidant Sales Corporation (GSC), another wholly owned subsidiary of Guidant. The Ancure Device was used to treat abdominal aortic aneurysms, a potentially life-threatening condition arising from the development of a weak area in the wall of the aorta. The Ancure Device, which is inserted through an incision in the patient's leg, uses a delivery system to place a woven fabric graft into the aorta to prevent rupture. Prior to the introduction of the Ancure Device, treating an abdominal aortic aneurysm required traditional surgery in which the patient's abdomen had to be cut open to allow the surgeon to reach the aorta.
After sales of the Ancure Device commenced, EVT became aware of various malfunctions associated with the delivery system used to place the graft. Some of these malfunctions resulted in the delivery system becoming improperly lodged in a patient's body, often requiring the removal of the delivery system by traditional open surgical repair. As a result, some EVT sales representatives informed doctors about a procedure involving breaking or cutting the handle of the Ancure Device's delivery system when the delivery system became lodged and could not be removed without resorting to traditional open surgical repair. This procedure, which became known as the "Handle-Breaking Technique," was not presented to the FDA for approval.
Under federal law, a company is required to file a medical device report (MDR) with the FDA when it appears that a device has malfunctioned in such a way that it may have caused or contributed to a death or serious injury, or has malfunctioned and would be likely to cause or contribute to a death or serious injury if the malfunction were to recur. 21 U.S.C. ยง360i(a)(1) (2000). When placement of the Ancure Device required additional surgical procedures, an MDR was required to be filed with the FDA. On March 16, 2001, EVT suspended commercial sales of the Ancure Device and recalled those devices remaining in circulation "after discovering a number of regulatory deficiencies relating to the Ancure System." By that time, more than 7,600 Ancure Devices had been sold. On June 12, 2003, EVT pleaded guilty to 10 felonies relating to the Ancure Device, including misbranding and making false statements to government regulators. See http://www.usdoj.gov/usao/can/press/html/2003_06_12_endovascular.html. In connection with the plea agreement, EVT agreed that it "knowingly and intentionally misled FDA about the frequency with which the delivery system of the Ancure Device malfunctioned." EVT also acknowledged:
"Between September 30, 1999 and March 16, 2001, defendant filed 172 MDRs for the delivery system of the Ancure Device. On or about March 23, 2001, defendant disclosed to FDA the existence of approximately 2,628 additional MDRs concerning the delivery system of the Ancure Device that had not been previously reported to FDA as required by law. Among these 2,628 MDRs that had not been timely filed were 12 deaths and 57 conversions to traditional open surgical repair."
As a result of the plea agreement, E
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