“How did all this resin end up in China if it was made in Texas?”
– Boston Scientific compliance coordinator
Internal emails show that Boston Scientific Corp. (BSC) is selling surgical mesh made of a Chinese counterfeit version of a plastic resin that the U.S. manufacturer says should not be used in the human body.
Here are highlights of the internal messages, disclosed for the first time in a petition that Mostyn Law filed March 30 with FDA, seeking a recall of the defective surgical implants:
- The U.S. manufacturer warns that its plastic resin, Marlex, made in Texas, should no longer be used in surgical implants: “MEDICAL APPLICATION CAUTION: do not use this Chevron Phillips Chemical Company LP material in medical applications involving permanent implantation in the human body or permanent contact with internal body fluids or tissues.” (Exhibit 9)
- Chevron Phillips refuses to sell the Marlex brand to BSC or other medical device manufacturers.
- July – BSC runs short of FDA-approved Marlex, threatening its $120 million-a-year implant business. (Exhibit 17) The company launches a global hunt for it, telling employees “to pull all strings possible” and authorizing payments for inside intelligence. (Exhibit 22)
- “Did you offer them money for the info regarding the customer who bought the HGX? Did you also asked [sic] them to call the customer to let them know we are willing to pay above street price? We have to pull all strings possible.” – Helge Batz, BSC director materials management, in a July 26, 2011, email to Michael Zhao of BSC’s supply management in Shanghai. Zhao had contacts with potential distributors of the Marlex brand, also known as HGX. (Exhibit 22)
- When Zhao asked if there were limits on such payments, Batz replied July 27, 2011: “Michael, money does not matter in this case.” (Exhibit 22)
- In the meantime, BSC tried and failed to buy Marlex from the U.S. manufacturer “Received negative response: ‘We are simply not interested in this business at any price, which is still the basis for our past agreement with your company.’ ” – McCaslin told BSC colleagues in an Aug. 5, 2011, email relating the rebuff from Phillips. (Exhibit 13)
- July – A Chinese company informs BSC that it can find a Chinese source for the Marlex brand but cannot provide a required Certificate of Compliance (C of C) for it.
- “I know…this is the ‘higher risk’ option…If there is no C of C available at all is this dead? I wonder if we could get a lot # from the bag and contact Phillips (who does not seem to want to talk to us).” – Todd McCaslin, BSC’s global sourcing director, in a July 28, 2011, email to Ronald Ciulla of BSC’s urology and gynecology R&D division. (Exhibit 22)
- After Phillips refuses help, BSC sends the lot number to an authorized Marlex dealer to determine if the Chinese product is genuine American-made Marlex. But the U.S. manufacturer says it is bogus.
- “I have been told by someone in the quality organization at Phillips Sumika that the lost number below is not valid. Can you send me a picture of the bag and the lot number. I will check again.” – Prasad Puttagunta of AK Plastics in an email August 15, 2011, to BSC’s Ann Charest, manager, global sourcing, resin. (Exhibit 24) Phillips Sumika is a joint venture between Chevron Phillips of The Woodlands, Texas, and Sumika Polymers America Corp.
- Ten days later, he says in another email to Charest that the lot number may have been “made up by a person” who packaged the supplies.
- BSC sends Puttagunta a photograph of the Chinese resin in a bag labeled “Marlex” with a lot number.
- “Unfortunately, we received the same answer. The lot number of the bag is not a lot number in their system. My guess is that the material was repackaged in China…As I mentioned in a separate email, I have been unable to discover who the Chinese distributors are and, Phillips Sumika will not take responsibility for material sold their [sic]” – Puttagunta’s follow-up email August 31, 2011, to McCaslin (Exhibit 24)
- August – Despite questions about the material found in China, BSC purchases 4,400 pounds of resin from Chinese company and ships it by air to the U.S.
- November – BSC buys 33,000 more pounds of Chinese resin, despite concerns about its authenticity, the lack of required export documents and potential legal liability.
- McCaslin, in an email Aug. 30, 2011, asks Zhao if he has the required “chain of custody” document for the resin or any paperwork to show where it originated. (Exhibit 28)
- Zhao responds Sept. 28, 2011, to McCaslin and another BSC executive, Charles Smith, that “we have not been able to locate any lot traceability with the distributor.” (Exhibit 28)
- BSC puts together plans to export it, even though it lacked certain required documents.
- The first shipment was small and sent by air, meaning there was “less chance to be audited” by authorities, Zhao says in a Dec. 1, 2011, email to a BSC global supply chain director. (Exhibit 29)
- But for the rest of the material, 33,000 pounds, BSC decided to divide it into three ocean shipments, as a way to avoid detection by customs agents.
- “Last time due to it’s by air and small amount, the 2 tons was not ‘inspected’ by the custom. The shipper basically put a blank bag over the original bag. This time since it has 3 containers and by sea, likely custom will inspect them. The shipper told me that the inspector is pretty good at their job and we need to ‘re-pack’ all 600 bags…” – Nov. 21, 2011, email from Zhao to BSC executive Charles Smith and others. (Exhibit 28)
- Because the resin is in apparently fake Marlex bags, BSC comes up with a scheme to say the material was made in China, making it easier to export.
- “We have lost all the original paperwork so we can’t prove that it was legally imported in the country and if we don’t get rid of the original bags or the writing on the bags when we claim they are from China (we have to say they are from China since we don’t have the original paperwork attached), if it is caught by custom, we will be in big trouble. Therefore the shipper told me it is better to re-pack all of them or find a way to get rid of al the words/writing on the bags.” – Continuation of Zhao’s email. (Exhibit 28)
- Because the company bought the material from a suspect supplier in China, some company employees begin to raise questions.
- “How did all this resin end up in China if it was made in Texas?” –BSC’s import/export compliance coordinator, Robert Mullally, April 12, 2012, to other staffers.
- Mullally also has concerns that the vendor didn’t have a certificate to prove traceability. ‘‘What kind of statement” is that? he asked. (Exhibit 1)
- “Counterfeit material from a supplier you use-ACTION REQUESTED” – Subject line on an email June 7, 2012, from John Kummailil, a BSC senior engineer, warning others in the company that the Chinese supplier previously tried to sell BSC counterfeit material. (Exhibit 3)
- “The hypothesis is that they re-bagged god knows what grade, or even recycled materials, in bags that have the grade # we were looking for,” he said in the email. (Exhibit 3)
- Kummailil said he wanted to warn others who might do business with that supplier. “This is just a data point to take into consideration. Please take any action you see fit, including doing thing at all.” (Exhibit 3)
- May and June – 33,000 pounds of counterfeit Marlex resin enter the US in three separate shipments by sea.
- After insisting for years that the resin from China was genuine Marlex, BSC abruptly shifted course. Recent letters from Boston Scientific to customers acknowledges that the plastic resin being used to make the surgical mesh is not the FDA-approved Marlex brand. (Exhibit 31)