A federal judge on Wednesday approved a plea agreement resolving charges against Magellan Diagnostics for concealing a malfunction in its lead-testing devices, which resulted in thousands of patients receiving inaccurately low results. U.S. District Judge Patti Saris in Boston accepted the plea agreement, imposing a sentence that requires Magellan to pay $32.7 million as part of an overall $42 million settlement with the U.S. Department of Justice. Saris had previously questioned the “unusual” terms of this deal.
In May, Magellan entered into a deferred prosecution agreement that resolved felony fraud conspiracy charges and included a guilty plea to two misdemeanor violations of the Food, Drug, and Cosmetic Act. The company, now owned by Meridian Bioscience, reached this agreement after prosecutors charged three former executives, including former CEO Amy Winslow, last year. Those executives have pleaded not guilty and are scheduled to stand trial in April.
Prosecutors allege that Magellan and its executives misled customers and the U.S. Food and Drug Administration regarding the reliability of its lead detection devices, which tested for lead levels and poisoning in both children and adults. The malfunction impacted three devices in Magellan’s LeadCare line, including one that conducted over half of all blood lead tests in the U.S. between 2013 and 2017.
Emerson Moser, Meridian’s general counsel, apologized in court to anyone affected by inaccurate test results. “We can be better, we are better, and we will be better,” he stated.
During the hearing, Judge Saris accepted the plea agreement, imposing a fine of $21.8 million and ordering the forfeiture of another $10.9 million. Instead of ordering restitution, the deferred prosecution agreement requires the company to establish a $9.3 million fund, administered by an outside compliance monitor, to compensate patients who experienced delayed detection of lead poisoning due to Magellan’s actions.
Saris had expressed concerns in June about this provision, noting it was “unusual” for restitution to be paid through a process not directly overseen by the court. However, on Wednesday, she acknowledged that her concerns had been somewhat alleviated, particularly since victims would retain the right to sue the company if they were dissatisfied with the compensation. “I do think a victim will still have power if the victim is unhappy,” Saris said.
The case is titled United States v. Magellan Diagnostics Inc, U.S. District Court for the District of Massachusetts, No. 1:24-cr-10144.
