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Olympus unit pleads guilty to resolve U.S. duodenoscope probe


(Reuters) – An Olympus Corp subsidiary pleaded guilty on Monday and agreed to pay $85 million to resolve charges that it failed to file reports with U.S. regulators regarding infections connected to its duodenoscopes while continuing to sell the medical devices used to view the gastrointestinal tract.

Olympus Medical Systems Corp and Hisao Yabe, a former senior executive at the company in Japan, pleaded guilty in federal court in Newark, New Jersey, to distributing misbranded medical devices, the U.S. Justice Department said.

As part of a plea deal, U.S. District Judge Stanley Chesler sentenced Olympus to pay an $80 million fine and forfeit $5 million, the department said.

The U.S. Food and Drug Administration issued a new warning on Monday about the persistent threat of contamination from reusable duodenoscopes. In preliminary studies, the FDA said, 3 percent of samples collected from duodenoscopes by manufacturers tested positive for “high concern” bacteria, such as E. coli, that are often associated with disease.

Olympus in a statement said it had agreed to take steps to enhance its regulatory processes and that the investigation did not identify any direct harm to patients caused by its failure to file the reports.

Yabe’s lawyer had no immediate comment. Yabe, 62, is scheduled to be sentenced on March 27, and faces a maximum of one year in prison.

Duodenoscopes are flexible tubes with lighted video equipment that are snaked down a patient’s throat to diagnose or treat disorders of the gastrointestinal tract.

At least 35 patients in U.S. hospitals have died since 2013 after developing infections tied to contaminated Olympus duodenoscopes, according to hospitals and public health officials.

Olympus issued a safety alert about duodenoscopes in Europe in 2013. But it did not warn U.S. hospitals about the risk of contamination until 2015, after there had been so-called superbug outbreaks in Seattle, Pittsburgh and Los Angeles.

In 2016, Olympus recalled its TJF-Q180V duodenoscopes and made alterations to reduce the risk of contamination.

Prosecutors said the Tokyo-based company admitted that in 2012 and 2013 it failed to file with the U.S. Food and Drug Administration adverse event reports relating to infections in Europe connected to the TJF-Q180V.

The FDA compiles reports of illnesses and injuries associated with drugs and devices it has approved in order to monitor potential problems once they are on the market.

The Justice Department said the adverse events Olympus failed to report included the infection of 22 patients with Pseudomonas aeruginosa in the Netherlands in early 2012 and the E. coli infection of three patients in France in November 2012.

Prosecutors said Yabe was personally responsible for the failure to file the information with the FDA relating to infections in the Netherlands when he was the company’s top regulatory official.

Reporting by Nate Raymond in Boston, Chad Terhune in Los Angeles and David Alexander in Washington and Aakash Jagadeesh Babu in Bengaluru; editing by Lisa Lambert, Bill Berkrot and Richard Chang

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