Fallout could lead Medtronic to sell its spine business. The latest furor over Medtronic Inc.’s Infuse bone growth product will likely lead to increased regulatory scrutiny of the spine device, as well as possible class action lawsuits, a Wall Street analyst says. According to a Forbes report, Larry Biegelsen of Wells Fargo says the fallout could lead Medtronic to sell its spine business.
Last week, The Spine Journal published an entire issue dedicated to Medtronic’s Infuse product, a recombinant human Bone Morphogenetic Protein (rhBMP-2) that is widely used in spinal fusion surgery. One of the articles included in the issue asserted that in 13 Medtronic-funded studies conducted between 2000 and 2010, side effects – including male sterility, infection, bone loss and unwanted bone growth – occurred 10 to 50 times more than what was stated in the final, peer-reviewed published articles.
According to that study, every large Infuse study involved at least one researcher who received at least $10 million in royalties from Medtronic.
Infuse product was the subject of a Senate Finance Committee inquiry and a U.S. Justice Department investigation
Even before this, the Infuse product was the subject of a Senate Finance Committee inquiry and a U.S. Justice Department investigation. According to Biegelsen, the Infuse side effect revelations could cause the U.S. Food & Drug Administration (FDA) to launch a safety review of the product.
On top of that, the disclosures could spark a wave of Infuse class action lawsuits filed by people who sustained injuries linked to the product.
In his report, Biegelsen wrote:
“We think The Spine Journal papers could lead to the following outcomes: (1) a significant reduction in the sales of MDT’s spine biologics franchise; (2) a reduction in the sales of MDT’s spinal instrumentation business; (3) a potential FDA review of Infuse, including an Advisory Committee meeting, which could lead to more limited use of Infuse; (4) potentially larger criminal penalties in the Department of Justice (DOJ) investigation of the off-label promotion of Infuse; (5) the potential emergence of class action lawsuits; and (6) the potential sale of the entire spine business.’
Biegelsen said the controversy could turn healthcare providers against Infuse, leading to as much as a 50 percent drop in sales. He also warned that settlements in potential Infuse class action lawsuits could cost Medtronic as much as $1.2 billion.
Biegelsen also said that competing products, such as NuVasive and Orthofix, could benefit from Infuse’s problems.