Lawsuit: Whistleblower accuses Medtronic of installing crony in spine journal to promote Infuse

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A whistleblower accused Medtronic (NYSE:MDT) of installing a stooge, spinal surgeon Dr. Thomas Zdeblick, as editor of an influential spine journal to push positive – and possibly premature – data on its Infuse bone growth stimulant.

The qui tam whistleblower lawsuit, originally filed in July 2011 in the U.S. District Court for Southern Mississippi, also alleges that medical device super-power Medtronic violated the Medicare False Claims Act by filing reimbursement claims driven by illegal kickbacks.

The lawsuit, led by whistleblower Joanne Hartwig, implicates Zdeblick for his part in furthering the company’s Infuse marketing by taking over as sole editor-in-chief of the Journal of Spinal Disorders, which he renamed the Journal of Spinal Disorders and Techniques.

Zdeblick, who’s in the hot seat over a running tab with Medtronic that’s topped $25 million since 2003, invented the LT-Cage, the only FDA-approved device for delivering the Infuse product to the surgical site.

Under his watch, the journal published articles "touting the benefits of Infuse" while allowing researchers to conceal their financial ties to Medtronic, according to court documents.

Zdeblick allegedly failed to disclose "that he profited from each and every surgery which used Infuse through rights in the exclusive delivery vehicle, his LT-Cage," according to the lawsuit.

It’s not the first time Zdeblick’s come under fire for his ties to Medtronic. In 2009 a Senate Finance Committee investigation revealed that he was implanting 4 types of Medtronic devices he’d invented or helped develop. The University of Wisconsin, where Zdeblick is the chairman of orthopedics and rehabilitation, spent $27 million on Medtronic spinal devices between 2004 and 2010, according to the Milwaukee Journal-Sentinel.

Medtronic is also in the hot seat over Infuse, weathering a spate of lawsuits and a Spine Journal issue last summer dedicated solely to serious concerns about its safety. The U.S. Justice Dept. and the U.S. Senate are each conducting probes into the bone morphogenetic compound and its Fridley, Minn.-based maker’s marketing practices. The furor eventually died down, at least on Wall Street (where analysts initially warned of a possible 3-cent-per-share dip in overall profits).

The Infuse line has been under investigation since 2008 over concerns that the product’s sales were driven primarily by active promotion of off-label uses. The device giant settled a DOJ lawsuit in December 2011 for $23.5 million without admitting wrongdoing, but is still on the hook in a separate shareholder suit  accusing it of inflating share prices using misleading statements about Infuse. In that case, the shareholders demanded confidential documents from an undisclosed witness who staunchly refused to reproduce them on the grounds that they presented "a real and appreciable danger of self-incrimination."

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