A federal appeals court has ruled that Medtronic must face a whistleblower lawsuit over FDA clearance of certain spinal fusion devices.
The Dan Abrams Company sued Medtronic in 2015 claiming that Medtronic defrauded the FDA into granting 510(k) clearance to certain Verte-Stack cervical vertebral body replacement (VBR) devices used in spinal fusion surgeries. The lawsuit also claims that Medtronic unlawfully marketed the devices for an off-label and contraindicated use, and illegally compensated physicians to use them.
Abrams also argues that these allegedly fraudulent practices caused physicians to submit false claims to Medicare. Dan Abrams Company is an LLC whose sole employee, Bryan Shapiro, formerly worked for Medtronic. His “fraud-on-the-FDA” claim states that since Medicare reimbursement requires FDA clearance, the subject devices would have been ineligible for reimbursement but for Medtronic’s alleged fraud.
A U.S. District Court judge in California tossed the entire lawsuit in 2019, but an appeals court panel last week reinstated one claim. According to that claim, certain “contraindicated-only devices” were not properly cleared by the FDA for any use and therefore are not substantially similar to the predicate device. Abrams described these contraindicated devices as those that allegedly cannot be used for their labeled intended use and can only be used for their contraindicated use in the cervical spine.
Abrams “alleges that Medtronic falsely represented in its clearance application that they were intended for use in the thoracolumbar spine (the part of the spine below the neck) when in fact they could not be used there and could only be used in the cervical (neck-area) of the spine,” the appeals panel wrote.
Abrams “claims that Medtronic knew that cervical VBRs posed different questions of safety to its previously approved devices, and if Medtronic disclosed that the devices were intended for use in the cervical spine, then the FDA may have required Class III approval,” the appeals court judges continued. “These considerations — intended use, similarity to a predicate device, and different questions about safety — are precisely those that the FDA considers in granting Class II certification.”
Medtronic argues that the False Claims Act is not the proper vehicle to bring a fraud-on-the-FDA claim. The appeals court disagreed, citing a previous case in which it allowed the plaintiff’s fraud-on-the-FDA theory to go forward.