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Boston Scientific Raises Cost For Settlement

The medical device maker will pay as much as $240 million instead of the initial $195 million from a defibrillator lawsuit settlement announced in July.

NATICK, Mass. (AP) — Boston Scientific Corp. said Monday it has agreed to increase the amount it will pay to settle thousands of heart patients' legal claims involving potentially faulty defibrillators by $45 million (euro31 million).
 
The increase means the medical device maker will pay as much as $240 million (euro164 million), instead of the $195 million (euro133 million) from a settlement announced July 13 that did not cover additional litigation included under the new total.
 
The previous settlement involved a least 4,000 patients' claims involving Guidant Corp. defbrillators that were subject to recalls and safety warnings in 2005 and 2006, before Boston Scientific Corp. acquired Guidant in April 2006 for $27 billion (euro18.4 billion). The expanded settlement covers 8,500 claims, including claims that had been consolidated into a case in U.S. District Court in Minnesota, and other claims nationwide.
 
Proceedings in state court in Minnesota have been stayed because of the expanded settlement, reached in mediation conducted before a federal magistrate judge in Minneapolis.
 
Natick, Mass.-based Boston Scientific said it believes the expanded agreement covers ''substantially all'' U.S. cases arising from the recalls and warnings.
 
Charles Zimmerman, an attorney for a steering committee representing plaintiffs, called the amended agreement ''great news'' that will provide plaintiffs ''with substantial relief.''
 
Boston Scientific shares rose 5 cents to $12.15 in morning trading Monday.
 
The plaintiffs claimed Guidant knowingly sold defibrillators with potentially life-threatening defects over a three-year period. Some of the problems involved wiring flaws that could prevent a defibrillator from delivering a shock to jump-start a suddenly failing heart and restore a healthy rhythm.
 
The company was criticized for dragging its feet in notifying doctors, patients and regulators about the problems.
 
Many of the plaintiffs' devices never malfunctioned, but they sought compensation for medical monitoring and anxiety.
 
In a March 31 regulatory filing, Boston Scientific said it had set aside $732 million (euro499.5 million) to cover expenses in the cases — about three times the amended settlement amount.
 
The new settlement total is in addition to $16.75 million (euro11.5 million) that Boston Scientific said in August it would pay to settle investigations into the defibrillator problems by attorneys general in 35 states and Washington D.C.
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