SEC-PR-2412-201

According to the SEC’s order, BD determined in 2016 that software changes made to the Alaris pump required regulatory clearance from the Food and Drug Administration (FDA). However, BD did not have the data required for clearance, and generating the data would delay the release of new features, so BD continued selling the pump without clearance. By January 2019, BD identified more than 25 flaws in the pump’s software that its experts categorized as presenting risks of the greatest potential harm to patients. Rather than inform investors that these issues heightened the risk that the FDA would limit BD’s ability to continue selling Alaris—a product whose sales contributed about 10 percent of BD’s profits—BD made misleading statements in its periodic reports about its regulatory risks.

The order finds that BD revealed Alaris’s software flaws to the FDA in October 2019 and proposed that the agency allow it to continue selling the pump while it worked to fix the flaws and complete the lengthy FDA clearance process. The FDA firmly rejected this proposal so BD immediately stopped shipping Alaris. But several days later, BD decided it would resume shipping the pump after fixing its software flaws – without FDA clearance. During an earnings call in early November 2019, BD misleadingly told investors that it was pausing Alaris sales to make “some improvements” to the pump as part of its strategy to “continually iterate and make enhancements to the platform.” BD also made financial forecasts for fiscal year 2020 without warning investors that those forecasts were based on conjecture that the FDA would allow BD to resume sales of Alaris without clearance.