Medtronic Infuse Shareholder Lawsuit Witness Must Testify, Judge SaysFeb 3, 2012 | Parker Waichman LLP
A former Medtronic Inc. employee won't be able to avoid testifying in a shareholder lawsuit involving the device maker's alleged illegal promotion of off-label uses for its Infuse bone graft product. Yesterday, a federal judge in Minnesota ordered the unnamed witness to testify and turn over a key Infuse document, ruling that he had waived his 5th Amendment protections.
In August 2009, the Minneapolis Firefighters’ Relief Association and other institutional investors alleged in an amended complaint that Medtronic had deliberately promoted the Infuse system for off-label uses and failed to disclose that its sales were largely dependent on unapproved uses. The lawsuit sought class action status on behalf of holders of the company's stock who purchased or acquired their shares between November 2006 and November 2008 and suffered financial losses.
Yesterday, U.S. District Judge Paul Magnuson affirmed a magistrate judge's order for the confidential witness, known in court filings as CW2. In doing so, Judge Magnuson said the decision to sign a declaration in support of one of Medtronic's earlier court filings disqualified him from such protection.
“Given the conclusion that CW2 testified as to the subject matter of the document in question in his declaration, Chief Magistrate Judge Boylan’s conclusion that he waived any Fifth Amendment privilege as to that document is indisputedly correct,” Magnuson said.
Infuse is a recombinant human Bone Morphogenetic Protein (rhBMP-2) that is widely used in spinal fusion surgery, however, it has only been approved by the U.S. Food & Drug Administration (FDA) for use in anterior-approach lumbar fusion. The FDA issued a safety alert for rhBMP products in 2008, after their off-label use in cervical spine (neck) surgeries had been associated with serious, and sometimes life-threatening complications.
Medtronic is facing a mountain of legal trouble over Infuse, including several product liability lawsuits claiming it caused serious complications in patients. Over the summer, The Spine Journal raised serious questions about the validity of the research that was used to gain FDA approval of Infuse. In November, a prominent researcher warned that Infuse may be associated with a higher risk of developing cancer.
In addition to lawsuits, the U.S. Justice Department, the U.S. Senate Finance Committee and the California attorney general are all investigating Infuse.