TODAY | March 14, 2014
>>> we're back now with a cautionary tale involving an amazing medical technology . as we've shown you in the past, cochlear implants can restore hearing and change lives, but lisa myers tells us how one company's defective implants led to pain and suffering for hundreds of families. lisa, good morning to you.
>> hey, matt. good morning. it's hard to believe that any company would knowingly sale a defective medical device to be implanted in a child, but internal documents obtained by nbc news suggest just that. they reveal that the second largest cochlear implant maker in the world repeatedly withheld information. grace is a remarkable little girl who suffers from an undiagnosed condition that has left her unable to walk, use her arms or breathe on her own. here she is with her brother, throwing out the first pitch at a cincinnati reds game. what else do you like to do, grace ?
>> i like to go swimming in the summertime.
>> at age 3, grace became completely deaf.
>> we then went to see the ent doctor and when she said we can get her to hear if you want her to and i was like, okay, let's do it tomorrow.
>> so, in december 2005 , grace , then almost 4, received a cochlear implant called the hires 90 k. an external device with a microphone picks up sound and digitally transmits it to a digital device surgically implanted into the skull. electrodes then send the information to the auditory nerve to the brain. but only three months after it was implanted in grace 's skull, her parents received a startling letter. the device was being recalled. because of the possibility of high levels of moisture inside a key component.
>> i was hot. i was livid. they had to have known there was issues going on at the time it was implanted in my kid's head.
>> internal documents reveal the company did know. almost a year and a half before grace 's surgery, the fda identified 237 devices with excessive moisture. an employee expressed concern that the company failed to tell the fda it hadn't conducted a key test that mimics the human body . later in 2004 , the company recalled the device and thought it had fixed the moisture problem, but it got worse. the next year, a senior official wrote, product failures continue to occur at an alarming rate and we're in significant danger of losing our key accounts in new york city . yet, they kept on selling the device. meanwhile, grace 's hearing hadn't improved much and doctors figured out her device, too, had failed, because of excess moisture.
>> time and time again, they had a chance to fix something wrong. even before it got to us and then even after it got to us and it seemed like they chose not to.
>> in 2006 , after 4,000 devices had been implanted, advanced buy on ices finally recalled and stopped selling the defective implant. the company admitted it failed to put into place an effective quality system . yet when we recently visited the company under new ownership, advanced bionics denied any wrong doing and said that it tested the product according to industry standards. officials say they didn't pull the device off the market until two years after the failures began because it took that long to figure out the cause of the moisture. but even if you don't know what is causing the problem, when you have evidence that these things are failing at an alarming rate, why don't you stop selling them?
>> we went through the process that we thought was appropriate to identify the cause of this issue and we dealt with it as quickly as we could in order to ensure the safety and well being of our patients.
>> the company is offering to replace detective devices and now says it has a rate of 99% reliability.
>> the quality and importance of that is something we really take to heart.
>> they knew. they knew and could have helped us prevent that with our kid.
>> today, grace has a new implant made by a different company, but her parents are still upset about lost years of development grace will never get back.
>> is it that she's your little girl and this happened to her?
>> sure. someone takes something, can't get it back.
>> now, the fda accused the company of exposing patients to unnecessary health risks and surgeries. the company paid $1.1 million to settle the charges without admitting wrong doing. matt, one little girl suffered electrical shocks and convulsions from the implant. her family sued and the jury found the company acted with reckless disregard. it's now estimateded that 1500 of these devices have failed.
>> lisa, thank you very much. it's infuriating when you think of all that grace has gone through and continues to go through.
>> and so many other children.
>>> back in a moment. this is "today" on nbc.
>>> we're back now. the first day of spring just six days away and with the