Johnson & Johnson (NYSE:JNJ) subsidiary DePuy Synthes lost its bid to have some rand jury records unsealed for a wrongful death lawsuit brought over its Norian bone cements.
At least 5 patients died during otherwise routine operations after the Norian cement was used off-label in their spine surgeries. The bone cement was initially developed by a company called Norian, which Synthes bought in 1999 for about $50 million. Synthes, in turn, was acquired by J&J for $21.3 billion in 2012.
The FDA approved Norian for use in arm bones and portions of the skull, but in 2007 required Synthes to put a warning label on the product about its contra-indication for spine surgeries. Lawsuits filed by the families of the patients who died allege that Synthes knew as early as 2002 that Norian was unsafe for use in the spine due to its propensity to form clots in the bloodstream.
Synthes paid paid $22.5 million in fines and was forced to sell Norian to settle federal criminal charges that it ran an off-label promotion scheme for the cement. Four Synthes executives – Michael Huggins, Thomas Higgins, John Walsh and Richard Bohner – were sentenced to prison terms after pleading guilty to misdemeanor charges over the scheme. A series of wrongful death lawsuits followed, brought by the families of deceased patients; Synthes settled one of those cases after a jury cleared the doctor and medical center also named as defendants.
In the case of two other patients who died during vertebroplasties in 2003 and 2004, one of the treating surgeons testified during discovery that both a sales rep and an executive from Synthes told him that the Norian cement was FDA-approved for vertebroplasties, according to court documents. Synthes asked the U.S. District Court for Eastern Pennsylvania to unseal some of the grand jury documents in the case and appealed to the U.S. Court of Appeals for the 3rd Circuit after it was denied.
Last week the appeals court denied the Synthes motion in a unanimous decision.
“The interest in secrecy in this case remains great. Synthes is hoping to use grand jury materials to undermine the credibility of Dr. Nottingham, a key witness during the grand jury proceeding, and to impliedly shift blame for the death of his patient to him, away from Synthes. This is precisely the kind of ‘future retribution’ that could chill the candor of future grand jury witnesses. While this need for secrecy is not insurmountable, it has not been overcome in this case,” the 3rd Circuit ruled.
The appeals court also shot down the company’s argument that some of the interviews with Dr. Paul Nottingham that never made it to the grand jury shouldn’t be subject to the grand jury secrecy rule. The higher court also shot down Synthes’s argument that business records, even if presented to a grand jury, are not subject to the secrecy rule because they were created independent of the grand jury probe.
Kensey Nash (NSDQ:KNSY), which paid $22 million for the Norian product line, was later bought up by Dutch firm Royal DSM for $360 million in 2012
