Boston Scientific Replies to Medinol Charges

A week after stent manufacturer Medinol, Ltd. (Tel Aviv, Israel) announced a lawsuit against its chief client, Boston Scientific Corp. (Natick, MA, USA), the president of Boston Scientific, Jim Tobin, talked about the suit during the company's annual meeting of securities analysts.

Tobin said that Boston Scientific began development of a stent manufacturing line (in Ireland) independent of Medinol because the contract between the two companies specifically provided for an independent line, in case Medinol could not meet Boston Scientific's supply needs. Medinol was required by the contract to design and build the line but refused and then later cut off the supply of stents to Boston Scientific. Boston then tried to set up the line itself, without telling Medinol so its stent supply would not be cut off again. Contrary to Medinol's claims, Boston Scientific never completed the line and never sold a single stent made on it. Tobin said Medinol had threatened a dozen times to cut off its supply of stents unless Boston Scientific paid exorbitant premiums or met some other demand.

Tobin also said that it was Medinol, not Boston Scientific, that drafted some of the very language in submissions to the U.S. Food and Drug Administration (FDA) that Medinol now claims is fraudulent. That language had to do with whether Medinol was a component supplier or a finished device manufacturer. Tobin said Medinol was always described as the component supplier, which was accurate. It is Tobin's view that the motive for many of Medinol's actions has been to get Boston Scientific, which had been in negotiations to buy Medinol, to pay a higher price for the company.





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