Former Magellan exec to plead guilty to concealing lead testing device defect

By Nate Raymond

Feb 27 (Reuters) - A former executive at Magellan Diagnostics has agreed to plead guilty to concealing from regulators that the company had discovered a malfunction in its lead-testing devices that led thousands of patients to receive inaccurately low results.

Reba Daoust, the company's former manager and director of quality assurance and regulatory affairs, had been scheduled to go on trial in federal court in Boston on April 7 alongside two other former executives including Magellan's former CEO.

Prosecutors on Wednesday revealed that she had instead agreed to plead guilty to one count of making false statements to the U.S. Food and Drug Administration from 2015 to 2017 concealing that Magellan had discovered the malfunction in 2013.

Prosecutors as part of the plea deal agreed to recommend that Daoust serve six months in prison and dismiss various other charges against her, including that she committed wire fraud and conspired to defraud the FDA.

She is the first of the three former executives to agree to admit wrongdoing following their indictment in April 2023. Charges remain pending against Amy Winslow, Magellan's ex-chief executive, and Hossein Maleknia, its ex-chief operating officer.

Laura Angelini, a lawyer for Daoust, in a statement said her client was "pleased to have reached a resolution with the government that will result in a complete dismissal of all counts alleging conspiracy and a specific intent to defraud the FDA and Magellan's customers."

U.S. District Judge Patti Saris scheduled Daoust's plea hearing for March 5. U.S. Attorney Leah Foley's office declined to comment.

Massachusetts-based Magellan, which is today owned by Meridian Bioscience, in May agreed to pay $42 million and plead guilty to resolve related charges concerning the reliability of devices it sold for detecting lead levels and lead poisoning in the blood of children and adults.

The malfunction affected three of Magellan's testing devices in its LeadCare line, including one that accounted for more than half of all blood lead tests conducted in the U.S. between 2013 and 2017, according to prosecutors.

In 2013, the company discovered a malfunction that could cause blood lead test values to be lower than actual values. Prosecutors said Daoust was one of the first employees to learn about the problem and informed Winslow and Maleknia about it.

But prosecutors said the three executives never reported the issue to the FDA and only notified the agency after Ohio-based Meridian had acquired the company for $66 million in 2016. A recall was launched in 2017.

The case is United States v. Winslow, et al, U.S. District Court for the District of Massachusetts, No. 1:23-cr-10094.

For the U.S.: Kelly Begg Lawrence, James Herbert and Leslie Wright of the U.S. Attorney's Office for the District of Massachusetts

For Daoust: Laura Angelini, Tara Singh and Michael Connolly of Hinckley, Allen & Snyder

Read more:

Lead testing device company Magellan sentenced for concealing defects

Judge questions 'unusual' DOJ plan to pay lead-testing device victims

Medical device company to pay $42 million to resolve US lead-testing defect charges

Ex-Magellan Diagnostics execs charged with concealing lead-test defect