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Medical Device Company Cannot Keep Judicial Records Secret, Public Citizen Tells Court

August 8, 2006

Medical Device Company Cannot Keep Judicial Records Secret, Public Citizen Tells Court

Guidant’s Attempts to Conceal Pricing Information Violate Public Interest

WASHINGTON, D.C. – The briefs and evidence kept secret in a case involving the medical device company Guidant Corporation must be unsealed, Public Citizen said in a motion filed today in the U.S. District Court for the District of Minnesota.

The motion seeks to make public judicial records from the closed court case Cardiac Pacemakers v. Aspen II Holding Co., in which two subsidiaries of Guidant that produce and sell controversial cardiac rhythm management (CRM) devices sued the health care consulting company Aspen Health Care Metrics for publishing information about the prices of Guidant’s pacemakers. The briefs supporting and opposing summary judgment, and all supporting papers, were filed under seal without any documentation of need for secrecy. Consequently, information highly important to the public interest will remain secret unless the seal is lifted.

“Under well-established law, the public has a presumptive right of access to judicial records, which may only be overcome by a showing of sufficiently important countervailing interests,” the motion reads. “Guidant has never made such a demonstration, and it does not appear that Guidant will be able to do so.”

Guidant has sought to conceal the prices paid for its CRM devices by extending confidentiality agreements with its hospital customers to members of the public. It charged Aspen with interfering with its contracts and stealing trade secrets, even though the consulting company is a third party that did not agree to be bound by the confidentiality clauses in Guidant’s business contracts. The court’s partial summary judgment ruled against Aspen for contract interference, and the rest of the case was settled before trial. Public Citizen intervened independently today by filing a motion to unseal the summary judgment papers.

Guidant’s attempts to suppress publication of its products’ prices are detrimental to the public interest in maintaining price transparency, Public Citizen told the court. Guidant’s policy threatens to foster the artificial elevation of prices, which could limit public access to affordable health care. Guidant also has been implicated by former employees in a scheme to use pricing secrecy to defraud state and federal government agencies over the medical bills of senior and indigent citizens.

Other hospitals, purchasing organizations and health care industry actors who are subject to Guidant’s lawsuit threats should have access to the court records in the Aspen case to determine if they are liable and to better prepare their own defense, Public Citizen argued. Guidant already has used the Aspen judgment to threaten the nation’s leading independent medical product testing organization, the non-profit Emergency Care Research Institute (ECRI), for publishing the prices of Guidant’s medical devices. ECRI’s pricing guide has been used by the health care industry for the past decade to determine the cost-effectiveness of various competing medical devices.

“The indications that Guidant has misused secrecy claims in the past and its threats to sue other parties based on the summary judgment ruling in this case mean that this information should be in the public domain,” said Paul Alan Levy, the Public Citizen attorney who filed the motion. “If applied broadly, Guidant’s argument could be used to silence media outlets that accept information from private whistleblowers who disclose company misdeeds in violation of confidentiality agreements.”

Mark R. Anfinson of Minneapolis serves as local counsel for Public Citizen. To view the motion, click here.