Becton, Dickinson and Company (BD) has agreed to pay $175m to the US Securities and Exchange Commission (SEC) to resolve the previous charges related to public disclosures.
The agreement settles the previous investigations related to its public disclosures and SEC reporting on its BD Alaris System.
Acquired from CareFusion in 2015, BD Alaris System is part of the US medical technology company’s Medication Management Solutions business.
According to the SEC, BD updated the software related to the Alaris pump in 2016, which required regulatory approval from the Food and Drug Administration (FDA).
BD sold the pump without obtaining FDA approval, as the company did not have the data required for the approval, and generating the data would delay the release of new features.
By January 2019, BD identified more than 25 errors in the pump’s software, which are categorised by its experts as high risks of potential harm to patients.
Instead of informing its investors about the issues with the device, BD made misleading statements in its periodic reports about its regulatory risks.
SEC Division of Enforcement acting director Sanjay Wadhwa said: “BD repeatedly painted a misleading picture of its Alaris infusion pump for investors and then doubled down by keeping them in the dark when the device’s issues came to a head with the FDA in late 2019.
“Public companies have a fundamental duty to accurately disclose material business risks and should expect to be held accountable when they fall short in that regard.”
According to the SEC’s order, BD violated antifraud, reporting, internal accounting controls, books and records, and disclosure controls provisions of the federal securities laws.
The settlement agreement indicates that BD neither admits nor denies the SEC’s findings but agrees to cease and desist from further violations of these provisions.
Also, BD agrees to retain an independent compliance consultant to review its disclosure controls and procedures, and to the civil penalty imposed.
BD in its statement said: “The BD Alaris System is safe and effective and is a critical part of health care in the US. The system has been used for many years to safely deliver IV therapies to patients, including throughout the Covid-19 pandemic.
“The updated BD Alaris System received 510(k) clearance from the US Food and Drug Administration in July 2023, and the company continues to update its Alaris fleet.
“BD has implemented a number of improvements to its operational and governance processes and related disclosure practices.”
