Massachusetts

CEO, Top Execs for Mass. Company Concealed Medical Device's Inaccurate Lead Tests, Feds Say

"We believe these executives knew about this malfunction for years, but failed to come clean to their customers and the FDA about it in order to boost their company’s bottom line,” the FBI said in a statement

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Three former top executives for a Billerica, Massachusetts-based company are facing federal charges for allegedly concealing a device malfunction that produced inaccurately low lead test results for tens of thousands of children and other patients.

Magellan Diagnostics Chief Executive Officer Amy Winslow, 51, of Needham Heights, Massachusetts; Chief Operating Officer Hossein Maleknia, 64, of Bonita Springs, Florida; and Director of Quality Assurance and Regulatory Affairs Reba Daoust, 66, of Amesbury, Massachusetts, were charged by the U.S. Attorney's Office with conspiracy to commit wire fraud, wire fraud, conspiracy to defraud an agency of the United States and introduction of misbranded medical devices into interstate commerce with intent to defraud and mislead.

Winslow and Daoust were arraigned in federal court in Boston Wednesday and released on personal recognizance. They are scheduled to return to court on May 31.

Maleknia was expected to make an initial appearance in federal court in Tampa on Wednesday.

Winslow's lawyer, BJ Trach of Latham & Watkins, issued a statement Wednesday saying, "We are extremely disappointed that the government chose to go forward with this misguided prosecution."

Trach said Winslow left Magellan amicably five years ago, and was a "thoughtful, compassionate, and effective leader there through difficult times for the company." He said she did not commit any crimes and the charges should never have been brought against her.

"We look forward to Amy having her day in court, and we are confident she will be vindicated," he said.

It was not immediately known if Daoust and Maleknia have attorneys.

NBC10 Boston has reached out to Magellan Diagnostics seeking comment on the charges.

Magellan's devices -- LeadCare Ultra, LeadCare II and LeadCare Plus -- detect lead levels and lead poisoning in the blood of children and adults using either blood draws through the arm or fingerstick samples, prosecutors said. LeadCare II alone accounted for more than half of all blood lead tests in the U.S. from 2013 to 2017.

According to the Food and Drug Administration, Magellan Diagnostics issued a voluntary Class I recall, the most serious type, in May 2021 for several of its blood lead testing products because the FDA had "significant concerns" that the performance of the test might provide falsely low results and could lead to health risks in young children and pregnant women. The recall was expanded several times.

The company remediated the issues with the products and was able to return them to market starting in February 2022.

"Obtaining falsely low results may lead to patient harm including delayed puberty, reduced postnatal growth, decreased IQ, and inattention and behavior problems in children," the FDA said in its report.

Prosecutors said Winslow, Maleknia and Daoust "repeatedly misled Magellan customers and the FDA about a serious malfunction" that affected their LeadCare devices when they were used to test blood drawn from patients. By hiding that malfunction and then later deceiving customers and the FDA about when they discovered the malfunction, they caused an estimated tens of thousands of children and other patients to receive inaccurately low lead test results.

“According to the CDC, there is no safe level of lead in the blood. Additionally, young children and pregnant mothers from low-income households living in public housing are the most vulnerable to lead exposure. We allege that these defendants deceived customers and the FDA about the reliability of medical tests that detected lead levels. By doing so, we assert that they endangered the health and lives of incredibly vulnerable victims,” U.S. Attorney Rachael Rollins said in a statement.

"We believe these executives knew about this malfunction for years, but failed to come clean to their customers and the FDA about it in order to boost their company’s bottom line,” added Joseph Bonavolonta, special agent in charge of the FBI's Boston Division. “The last thing sick children and their parents should have to worry about is whether diagnostic tests and devices live up to their manufacturer’s claims."

In a 2016 interview with NECN, Winslow talked about how Magellan sent lead testing kits and equipment for use in doctors offices in Flint, Michigan, in the wake of the city's drinking water crisis.

"We have the only system available that can be used to test for lead exposure in doctors offices," Winslow said. "It's very small, portable, easy to use, and it just takes two drops of blood from a fingerstick and a doctor can then deliver an immediate result. So if you have a worried parent, the doctor can say 'Your child's OK,' or 'Here's what we have to do to take action,' and our system is the only one who can do that. So we really wanted to make sure that it was easily available in Flint to help all thse families that are so concerned."

In this Feb. 17, 2016, interview on NECN, Magellan Diagnostics' then president and CEO, Amy Winslow, discusses the water crisis in Flint, Michigan, and says that lead exposure happens more than people may realize.

Prosecutors said the former Magellan executives first learned that a malfunction in their LeadCare Ultra device could cause inaccurate lead test results during the FDA clearance process back in June 2013. But they released the product to the market six months later without informing customers or the FDA about the malfunction. Several months after the product's release, customers discovered the malfunction on their own and complained about the inaccurate results. But the defendants continued to deny the malfunction, even though they had allegedly known about it for over a year, even before the product's release.

The indictment said Magellan discovered the same malfunction in 2013 in its LeadCare II device, by far its highest-revenue product. But Winslow and Maleknia were positioning the company for sale at the time, which prosecutors said would have been put in jeopardy if there was a malfunction affecting LeadCare II.

"It is alleged that Winslow told a Magellan employee to stop studying the malfunction in LeadCare II devices because Magellan needed to maintain 'plausible deniability,'" prosecutors said. "Only after Magellan was acquired by Meridian Bioscience, Inc. for $66 million in March 2016, did the defendants notify customers and the FDA about the LeadCare II malfunction. Magellan’s report to the FDA about LeadCare II allegedly made materially false and misleading statements and concealed material facts about Magellan’s discovery of the malfunction in LeadCare II."

After Meridian acquired Magellan, prosecutors said Winslow received a $2 million bonus and Maleknia a $448,000 bonus.

According to court documents, the defendants delayed notifying the FDA and then misled the FDA about the malfunction. The defendants only filed an FDA report for LeadCare Ultra after an outside consultant told Magellan that if they did not notify the FDA about the malfunction, the consultant would. In 2017, prosecutors said the FDA contacted Magellan and asked when the company first discovered the malfunction.

It is alleged that, at Daoust and Maleknia’s instruction, Magellan’s representative falsely told the FDA that Magellan first discovered the problem after receiving customer complaints in late 2014 and shortly before Magellan notified the FDA in 2015 – even though Magellan actually discovered the malfunction almost four years earlier, in 2013. Winslow also caused Magellan to send a false timeline to the FDA, which omitted the company’s internal 2013 studies about the malfunction.

The FDA ultimately found that the LeadCare Devices could not accurately test drawn blood samples, leading to a recall of all LeadCare Devices using venous samples and a warning to the public not to use LeadCare Ultra, LeadCare II and LeadCare Plus because of the malfunction.

Anyone who believes they might have received an inaccurate blood test reslt from a LeadCare device between 2013 and 2017 is asked to complete a questionnaire on the FBI's website.

CORRECTION: (April. 6, 2023 5:25 p.m. ET): A previous version of this story incorrectly stated the details of the recall on the LeadCare products. The text above has been updated to reflect the correct details from the FDA.

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