Medtronic (NYSE:MDT) is asking a federal judge in Mississippi to dismiss a whistleblower lawsuit accusing it 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 lawsuit, originally filed in July 2011 in the U.S. District Court for Southern Mississippi, also alleges that the Minneapolis-area medical device company 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.
But Medtronic said yesterday that the allegations are public knowledge, rather than original insights from Hartwig, meaning she’s ineligible to file a qui tam case.
"Contrary to blackletter law barring the filing of a False Claims Act complaint predicated on previous public disclosures, relator’s complaint cobbles together a jumble of irrelevant facts that are entirely based on publicly-available information," according to Medtronic’s motion. "Indeed, relator’s complaint even cites to [sic] newspaper articles, previous lawsuits, and other public documents as part of an improper attempt to obtain a windfall FCA recovery, without contributing any new information. In addition, impelled by a deep misunderstanding of the medical device industry and its regulation by the FDA, relator’s complaint fails to assert a viable cause of action as a matter of law."
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."
Last month a U.S. Senate panel blasted Medtronic over Infuse, saying the company deliberately schemed to suppress evidence of adverse effects and promoted off-label use. Medtronic "vigorously" refuted the Senate panel’s findings.
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