Device maker, Medtronic Inc., just announced another scheduled staff cut. We recently wrote that Medtronic was laying off about 4 percent of its spinal business workforce worldwide, which amounted to about 230 of it spinal division’s 5,600 employees,
This is the third year in a row, according to Pioneer Press, that Medtronic has announced cuts. The announcement was made during a conference call and confirmed that the device maker plans on eliminating 2,000 jobs worldwide. About half will impact Medtronic’s workforce in the United States, according to the firm’s chief financial officer, Gary Ellis.
“Some of our businesses, such as our spine business and some of our cardiac rhythm businesses, are in end markets that are not growing as rapidly as others,” Omar Ishrak, Medtronic’s chief executive officer, told Pioneer Press.
About one year ago, the device maker talked about cutting spinal device staff after reported slowed growth in its spinal and cardiac rhythm management units. Last year, Medtronic warned that cuts were likely. Various controversies surrounding the Medtronic InFuse® Bone Graft product helped prompt last year’s restructuring that sparked layoffs at the company.
InFuse® is a synthetic form of recombinant human Bone Morphogenetic Protein (rhBMP-2) approved for use in a certain type of spinal surgery. Over the last several years, the safety of InFuse® has been called into question, as has Medtronic’s marketing of the product.
Among other things, a critical analysis previously published by the Spine Journal charged that 13 Medtronic sponsored Infuse clinical trials failed to report serious complications, including uncontrolled bone growth, male sterility, retrograde ejaculation, and cancer.
Although Medtronic avoided federal charges related to the way in which it marketed InFuse®, the device maker continues to face personal injury lawsuits filed by patients who claim the company illegally marketed Infuse® for off-label uses. In fact, Medtronic was named in whistleblower lawsuit that accused the drug maker of installing a “crony” at the Journal of Spinal Disorders and Techniques to promote positive data on InFuse®. Ultimately, Medtronic agreed to pay $85 million to resolve a federal lawsuit brought by shareholders that alleged the company’s officers and executives made false and misleading public statements about InFuse®, which then artificially inflated the company’s stock price, according to a prior MassDevice.com report.
Regarding Medtronics’s cardiac unit woes, the U.S. Food and Drug Administration (FDA) recently issued a warning letter to the Providence Sacred Heart Medical Center over dangerously significant issues related to a study being conducted there on a Medtronic cardiac device. The Center was studying Medtronic’s CoreValve cardiac device and the warnings cited serious irregularities—the study of the device was meant for patients diagnosed with severe aortic stenosis. The clinical trial was using the non-FDA approved investigational device for transcatheter aortic valve implantation (TAVI). The FDA described blatant clinical trial protocol violations, which prompted the regulator’s warning letter to the site of the trials, the device manufacturer, and key investigators. According to the agency, four significant violations were cited. Medtronic said the violations were limited this one site.
Dr. David Gossman, who had worked at the Lahey Clinic Hospital, alleged he was terminated after speaking out about the financial relationship between Lahey Clinic and Medtronic. At the time of the report, Grossman alleged that Medtronic proposed that Lahey Clinic have “access to the CoreValve, a new heart valve that will be in clinical trials in the U.S. soon, predicated on the purchase and increased utilization of other products made by Medtronic,” according to a prior Courthouse News Service report. Gossman said the 2009 offer violated ethical guidelines and was made to Dr. Thomas Piemonte, director of Interventional Cardiology and the Cardiac Catheterization Laboratory at Lahey Clinic. Grossman accused Piemonte of having a “significant financial interest in Medtronic.” At the time of the report, Gossman sought damages for defamation and Whistleblower Act violations.