Confidential Consultation

July 5, 1994 — Wall Street Journal

Shiley Inc., the Pfister Inc. unit that made the Bjork-Shiley Convexo-Concave heart valve, agreed to pay $10.75 million to settle federal civil charges that it lied to win government approval of the device.

Shiley and Pfizer also agreed to provide up to $10 million for valve-replacement surgery for patients who received the Shiley device and are on government medical programs. Shiley, based in Irvine, California, sold the heart valve world-wide from 1978 until 1986, when it was pulled from the market. Failure of a tiny strut in the valve has been blamed for 360 deaths. At least 556 valves have fractured as of May 31, Shiley has said.

The government claimed that Shiley, in seeking marketing approval from the U.S. Food and Drug Administration, withheld evidence of fractures and overstated the valves’ resistance to blood clotting. Shiley admitted no wrongdoing under the settlement, which was announced on Thursday.

Pfizer and Shiley agreed in August 1992 to an out-of-court settlement of all present and future claims over the device. The centerpiece of the agreement, which affects 51,000 recipients worldwide, is a $75 million fund to be paid over 10 years to finance research into methods of detecting defective valves and, in certain cases, to pay the costs of replacing valves.

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