Investment Funds Lawsuit Against Medtronic Infuse Reopened. A federal appeals court just reinstated litigation from investment funds that alleged the medical device maker, Medtronic Inc., misled investors and physicians by hiding known risks from its very debated Infuse bone graft product. The move creates a legal obstruction for Medtronic.
Medtronic’s marketing of Infuse has long been the focus of mounting controversy over the way in which Infuse research was conducted, including that research was Medtronic-funded. Medtronic has also been accused of promoting Infuse off label, of minimizing Infuse’s risks, and of overstating the benefits of Infuse benefits. These accusations have led to a Senate probe, a U.S. Food and Drug Administration (FDA) warning, and independent studies.
The personal injury attorneys at Parker Waichman LLP continue to investigate possible lawsuits involving Infuse. The firm, which has decades of experience representing clients in medical device and drug litigation, continues to offer free legal consultations to individuals with questions about filing an Infuse lawsuit.
Infuse is a genetically engineered, synthetic, recombinant human Bone Morphogenetic Protein (rhBMP-2) that received FDA clearance for very specific uses. The FDA approved Infuse in 2002 for use in fusing damaged vertebrae in the lower spine. Infuse was not approved for use on the upper, or cervical spine, where it is now widely used, according to a prior report issued by Bloomberg Businessweek. While physicians are free to prescribe drugs and devices as they see fit, it is illegal for device and drug makers to promote these products for reasons not cleared or approved by the FDA, so-called “off-label” uses.
On July 1, 2008, the FDA issued a notification of serious complications associated with use of Infuse in cervical spinal fusions. Complications noted included excessive swelling in the neck, compressed airways, swallowing and breathing difficulties, and nerve damage. The FDA also specifically noted that it received reports of “life-threatening complications associated with” Infuse when used off-label in the cervical spine. The FDA reiterated that, “these products are not approved by FDA for this use.” Lawsuit allegations brought over Infuse involve patients implanted with Infuse during off-label procedures and who claim to suffer from significant complications such as bone overgrowth and neuropathy.
Infuse has been used in over one million surgeries globally to stimulate bone growth. The procedure typically involves a spine surgeon fusing two or more vertebrae in the patient’s back as a method in which to minimize or alleviate pain caused by degenerative disc disease. While Infuse is meant to more reliably make such fusion occur with less pain, Medtronic-sponsored research did not reveal Infuse risks that were later reported by independent studies.
Three investment funds have accused Medtronic of alleged securities fraud, involvement in a plan to conceal the safety risks of Infuse, and misleading investors over future Infuse sales. The lead plaintiff is the West Virginia Pipe Trades Health & Welfare fund; the other two plaintiffs are Union Asset Management Holding AG (Germany-based asset management firm) and the State of Hawaii Employees’ Retirement System.
When the lawsuit was filed in 2013, the funds filed against Medtronic and some of its shareholders accusing them of intentionally minimizing potential dangers associated with Infuse so that stock prices would be artificially inflated. The lawsuit, according to a MassDevice report at the time, was led by an unnamed “institutional investor,” and also alleged that Medtronic and its leadership made misleading statements concerning Infuse and the product’s use in pain management and degenerative disc disease treatment. At that time, the plaintiffs’ attorneys issued a release stating that Medtronic was involved in a scheme with some researchers to minimize Infuse side effects; the scheme led to artificially inflated stock prices during the class period, according to MassDevice. The lawsuit also cited data from a Yale University Study that found that Infuse was as safe as the other so-called “gold standard” treatments; however, the studies that supported the product were biased, according to the MassDevice report.
In 2016, Minnesota’s chief federal judge, John Tunheim, tossed the case on procedural grounds; however, a three-judge panel of the 8th U.S. Circuit Court of Appeals in St. Louis just unanimously overturned the Minnesota ruling, returning the case to federal trial court in Minnesota.
Medtronic moved its legal address to Ireland last year and keeps corporate offices in Minnesota. The device maker issued a statement indicated that it feels the shareholder litigation is without merit; however, attorneys for the groups that are suing Medtronic are thrilled with the decision. At the time of dismissal, discovery was in process and a motion was filed for class certification. These activities and others will continue.
Some Medtronic Infuse Studies Found Lacking
In another Medtronic lawsuit, the device maker learned in late 2016 that it will likely have to go to trial over the first of thousands of personal injury lawsuits involving the use of Infuse. A state appeals court judge in St. Louis ruled on December 8, 2016 that the plaintiff’s allegations that Medtronic fraudulently marketed Infuse should go to trial. Again, Medtronic denies liability in the cases, and moved to settle thousands of the 6,000 injury claims pending over Infuse.
Meanwhile, in 2013, following intense controversy, Medtronic paid $2.5 million to Yale University, providing Yale with its data on Infuse for research. The studies were conducted by two teams, one at England’s York University and one at Oregon Health & Science University. The research was called for following a June 2011 issue of the Spine Journal that alleged risks of adverse Infuse events could be upwards of 50 percent, according to MassDevice. One of the many responding editorials called for resignation of Dr. Eugene Carragee, then-editor of the Spine Journal, which devoted an entire issue to problems with growth proteins, such as Infuse, and refuted some Infuse research.
The Spine Journal’s probe concluded that 13 studies minimized or omitted evidence of Infuse safety risks and that the true rate of “frequent and occasionally catastrophic complications” associated with Infuse was between “10% to 50% depending on approach.” Doctors and researchers who authored the medical journal reports about Infuse were paid about $210 million in royalties and consulting fees, according to the prior Bloomberg Businessweek report.
Senate investigators also charged that Medtronic deliberately manipulated studies to mitigate any adverse reactions to Infuse side effects and to promote off-label use. The U.S. Senate Finance Committee also found problems with most of the initial Medtronic-supported Infuse research used to promote the product.