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Endoscope Manufacturer Sets Aside $450 Million for Its Role in Spreading Deadly Infections to Hospital Patients

Olympus, a manufacturer of medical devices and equipment, is at the center of a deadly “superbug” outbreak that killed three patients and sickened eight more at UCLA Ronald Reagan Medical Center alone. They have set aside $450 million dollars to settle these claims.

The Claim

In recent months, researchers discovered that Olympus failed to warn hospitals promptly that one of its endoscope products, known as a duodenoscope, is difficult to clean using standard procedures. As such, the device caused outbreaks, and it sickened dozens with antibiotic-resistant superbugs, including MRSA. A federal panel reviewed the scopes manufactured by Olympus and two other companies and deemed them unsafe for use. They also urged legislators to enact stricter laws and requirements to protect patients in these and similar circumstances.

On the Heels of an Accounting Scandal

Unfortunately, this is not the first sign of trouble for Olympus. This claim comes on the heels of a massive accounting scandal uncovered by whistleblowers back in 2011. The center of the scandal involved a massive cover-up of the company’s losses, which totaled more than $1.7 billion over the course of 13 years. Since the fraud went public, the company relied upon the sales of endoscopes and similar equipment to help it recover. Endoscopes such as the one that sickened patients in the US are the company’s largest generator of income.

The Outcome

On May 8, a spokesperson for Olympus announced that the company set aside some 53.9 billion in Japanese yen, which is the equivalent of about $450 million. Although US officials have yet to bring any claims to the forefront, both Olympus and the families of those sickened by the duodenoscopes expect them. Currently, officials are looking into possible violations of the False Claims Act and the Anti-Kickback Statute, which are both laws targeting fraud against the federal government. What’s more, despite the fact that Olympus released updated information to hospitals regarding the proper cleaning of the scope, a panel of experts agrees that patients are still at risk for infection.

Olympus is in a world of trouble at this point. Besides the $1.7 billion accounting scandal and the $450 million set aside for its role in spreading infections, there are also some questions concerning a Brazilian program designed to train doctors how to use Olympus’s equipment. The Chairman of Olympus, Yasuyuki Kimoto, is retiring this month.