A former sales rep for Exactech Inc. avoided prison but landed five years’ probation and $56,000 in fines after pleading guilty to setting up a kickbacks scheme to encourage orthopedic surgeons to use the company’s hip and knee implants.
Judge Garrett Brown of the U.S. District Court for New Jersey handed down the sentence to Douglas Donofrio, the former New York-area sales director for the Gainesville, Fla.-based company. Donofrio pleaded guilty to running the scheme between 2002 and 2008.
To entice surgeons to use Exactech’s products, Donofrio offered them consultancy deals and falsified the quarterly work reports of two doctors to conceal payments, according to court documents.
11th Circuit upholds preemption
A federal appeals court upheld a lower court’s ruling that product liability claims against medical device makers are preempted by federal rules.
The U.S. Court of Appeals for the 11th Circuit ruled that a decision in the U.S. District Court for Middle Florida was correct in dismissing Linda Wolicki-Gables’ suit against Johnson & Johnson (NYSE:JNJ) subsidiaries Arrow International and Codman &
Shurtleff and Greg Nelson, a medical device distributor.
In April 2002, according to court documents, Wolicki-Gables was implanted with an Arrow pump system to treat the pain from a pair of back injuries (Codman acquired Arrow in 2002, assuming the distribution arrangement formerly managed by Nelson, who joined Codman in 2003). The pump was designed to deliver continuous pain medication and to allow doctors to inject a single, large quantity of pain medicine.
The pump was working properly as of August 2002, but in July 2003 a dye test revealed that it was not delivering medication to Wolicki-Gables’ spine as intended. The pump was removed, tested and replaced; Wolicki-Gables’ doctor concluded that the pump catheter "obviously had crimped." A new connector between the pump and catheter was installed and the pump was re-implanted. The connector believed to have caused the problem was later destroyed.
Later that month Wolicki-Gables went to hospital because her legs were paralyzed. She was diagnosed with tranverse myelitis, an inflammation of the spinal cord and sent to a rehab facility. There an infection was discovered around the incision where the catheter entered her back and she was sent back to the hospital. The entire pump was removed but only superficial evidence of infection was found. Wolicki-Gables was discharged, but lost the ability to walk and became a paraplegic.
In 2007, she and her husband sued, alleging state claims for product liability, negligence, vicarious liability and loss of consortium. Many of those charges were dismissed and Arrow moved to have the remainder dismissed on preemption grounds. The Gables countered that the court should grant presumptions that preemption did not apply because replacing the connector and not the entire unit was an off-label use and that the destroyed connector was defective.
The lower court disagreed and dismissed the remaining charges in July 2009. The appeals court upheld that ruling, writing that the Gables’ allegations did not "set forth any specific problem, or failure to comply with any FDA regulation that can be linked to the injury alleged," according to court documents.
"[T]he Gableses have failed to demonstrate that a defect in the Arrow pump ‘most probably’ caused her injuries and not some other malfunction or obstruction," according to the documents.
Noble Biomaterials wins $3.3 million in patent infringement case brought by Argentum Medical*
Noble Biomaterials Inc. won a $3.3 million verdict from a Pennsylvania jury in a patent infringement lawsuit brought by competitor Argentum Medical LLC.
Argentum alleged that Noble’s SilverSeal anti-microbial bandages infringed one of its patents, but the U.S. District Court for Middle Pennsylvania dismissed the case on the grounds that Argentum did not have exclusive rights to the patent. That prompted a counter-claim by Noble that Argentum and its management, namely chairman and CEO Gregg Silver and president Tom Miller, "pursued baseless litigation and falsely advised the market" that Noble infringed the patent, according to a Noble press release.
The jury decided in Scranton, Pa.-based Noble’s favor, awarding $1 million in compensatory damages, $1 million from Miller and $1.25 million from Silver, respectively, in punitive damages.
Silver, in prepared remarks, said Argentum plans to appeal the decision.
OrbusNeich sues Czech doctor for libel over alleged clinical trial falsification
OrbusNeich is suing a Czech doctor and the hospital where he’s the head of cardiology, alleging that they falsified data for a clinical trial conducted at the facility.
The Hong Kong-based stent maker is accusing Dr. Pavel Cervinka and Masaryk Hospital in Usti nad Labem, Czech Republic, of libel in the Netherlands. Cervinka was lead investigator of a trial comparing OrbusNeich’s Genous bioresorbable stent with bare metal stents.
"The results of the study reported certain adverse events with the OrbusNeich stent. However, upon a review of the study by OrbusNeich and independent evaluators, it was revealed that there were many inaccuracies, misrepresentations and inconsistencies in the study, the study methods, and the reporting of the study conclusion," according to a press release. "Dr. Cervinka presented the results and conclusions of the study a number of times after he and the Masaryk Hospital were made aware of the defects in the study and the study reporting. As a result of the wide dissemination of the study and its erroneous conclusions that were not supported by the data, numerous clinicians stopped using the product and terminated clinical trials, and OrbusNeich suffered reputational damage. Despite many requests by OrbusNeich, neither Dr. Cervinka nor the Masaryk Hospital has made public disclosure of the defects or deficiencies in this invalid study."
The lawsuit seeks an injunction against further presentations or publications of the study, submission of the court’s decision for publication in the journal in which the study was published, among "other remedies."
Accuray settles shareholder lawsuit for $800,000
Accuray Inc. (NSDQ:ARAY) settled a shareholders’ class action lawsuit alleging that its management misled investors, putting the case to bed for $800,000 and some changes to its corporate governance rules.
The suit, filed in July 2009, accused the Sunnyvale, Calif.-based company’s management of concealing "material information concerning the quality and realistic likelihood of fulfillment of contracts in Accuray’s ‘backlog,’ a figure representing the direct revenue that Accuray expects to receive from the sale and servicing of the CyberKnife system," according to a press release.
During the last three quarters of fiscal 2008 the company removed about $127 million in backlog, according to the lawsuit, allegedly in violation of federal securities laws.
Although the company agreed to settle the case, it continues to deny any culpability, according to filings with the federal Securities & Exchange Commission.
Given Imaging notches German patent win over Medwork
Given Imaging Ltd. (NSDQ:GIVN) is touting a German court’s ruling that the MiroCam capsule endoscopy system manufactured by IntroMedic of South Korea infringes two of its patents.
"The court’s rulings allow Given Imaging to prevent IntroMedic’s German distributor, Medwork Medicinal Products and Services GmbH, from selling the current model of the MiroCam capsule and MiroView software in Germany," according to a press release from the Yoqneam, Israel-based firm.
Medwork appealed that ruling and, along with IntroMedic, initiated separate lawsuits "attempting to invalidate these patents" in the German Federal Patent Court.
*Correction, March 22, 2011: This article originally reported an incorrect amount for the judgment awarded to Noble. Return to the corrected sentence.