A Justice Department inquiry into Stryker’s marketing of human bone growth products has resulted in guilty pleas by former company sales representatives.
One former sales official pleaded guilty two weeks ago, and another one did in November, court documents show.
Stryker, a leading maker of medical devices, and the United States attorney’s office in Boston, which is conducting the inquiry, declined to comment. A spokeswoman for the attorney’s office said the investigation was continuing.
The inquiry, which began last year, involves several issues, according to court papers and Stryker filings with the Securities and Exchange Commission. The questions include whether Stryker abused a federal exemption that authorized it to sell only limited quantities of its bone growth products for “humanitarian” reasons, according to the documents.
The two former sales officials pleaded guilty to charges that they had promoted off-label use of the products even though they knew that such use had earlier caused problems in some patients.
The products in question are used by surgeons to aid the growth of bones that fail to heal properly. The field is a highly competitive one with more than 10 manufacturers involved.
One Stryker product, called OP-1, is a naturally occurring protein that promotes bone growth. The other product called OP-1 putty, is a moldable compound that includes the protein. Neither has been formally approved by the Food and Drug Administration for widespread medical use.
In 2001, the F.D.A. allowed limited use of OP-1 in patients whose broken shin or thigh bones had failed to heal properly. In 2004, the agency issued a similar ruling, allowing limited use of OP-1 putty in patients who had failed spinal fusion procedures.
The F.D.A. grants a “humanitarian device exemption” when it believes that a small group of patient may benefit from a treatment whose effectiveness has not been fully proved. Under such a waiver, a device can be used in up to 4,000 patients a year.
Court filings indicate that the Justice Department may be seeking to determine whether Stryker knew the products were being promoted for unauthorized, or off-label, use.
The inquiry poses new complications for Stryker, which is already operating under federal oversight as a result of an earlier Justice Department investigation of kickbacks paid by makers of artificial hips and knees to doctors.
Stryker disclosed the current investigation in an S.E.C. filing last November. In it, the company stated that subpoenas had been received by “current and former” employees of Stryker Biotech, the division involved.
Stryker’s legal problems over the bone growth products appear to have started two years ago in connection with a clinical trial.
Richard N. Katschke, a spokesman for the Medical College of Wisconsin in Milwaukee, said that Stryker officials had contacted the college in 2007 to say that paperwork reflecting approval of a clinical trial by the college’s institutional review board appeared to have been falsified. After investigation, it turned out that the paperwork had been altered by a company sales representative to conceal the fact that the wrong material had been sent to clinical researchers, Mr. Katschke said.
He added that the college had notified agencies including the F.D.A., as well as patients in the trial, none of whom he said had suffered any ill effect. The college was then subsequently contacted by federal prosecutors in Boston, Mr. Katschke said.
In November, a former Stryker sales representative, Darnell Martin, pleaded guilty to a federal charge that he had falsified the Medical College of Wisconsin documents.
In court papers, Mr. Martin stated that Stryker was “motivating its sales force with bonuses for obtaining a certain number” of approvals from facilities to run clinical trials for its products.
A lawyer representing Mr. Martin, Jennifer M. Ryan, declined to comment. Mr. Martin’s guilty plea was first reported by The Boston Business Journal.
This month, a former territory manager for Stryker, Justin Demming, pleaded guilty to a single count of misbranding a medical device in connection with the off-label promotion of the bone growth products. A lawyer for Mr. Demming, Robert A. Griffith, did not respond to a telephone call Thursday seeking comment.