A federal investigation into the marketing of a bone-healing product made by Hopkinton, Mass.-based Stryker Biotech is moving forward after prosecutors secured guilty pleas from two former salesmen.
Those pleas include an acknowledgement by the former salesmen that they promoted the use of the products in a way the company knew had created problems in the past under some circumstances.
A spokesman for Stryker Biotech’s parent Stryker Corp., Patrick Anderson, declined in an interview late Friday morning to comment on the investigation other than to say, “We’re in the process of responding to the Department of Justice.”
Stryker is a Michigan company with nearly $7 billion in annual sales.
Before the first guilty plea in the case in November 2008, Stryker Corp. (NYSE: SYK) already had been criticized by the U.S. Food and Drug Administration for failing to adequately monitor reports of problems with some products. Then in November and February of this year, U.S. Attorney Michael Sullivan’s office entered into plea arrangements with the former sales representatives.
Darnell Martin of Chicago and Justin Demming of Ohio signed agreements acknowledging they had encouraged medical professionals to combine Stryker’s bone products, even though the sales representatives knew doing so was not approved by the FDA and had produced “adverse events in some patients.”
Demming’s lawyer, Robert A. Griffith of Boston, declined Friday morning to comment.
Martin’s lawyer, Kathy B. Weinman of Boston, did not immediately return a telephone call Friday morning. In November, she declined to comment on her client’s guilty plea.
According to prosecutors, various Stryker employees distributed brochures giving instructions for mixing bone products in ways not approved by the FDA.
Court records do not elaborate on the “adverse effects,” but an FDA database of complaints shows there were at least several episodes of problems. Some of the events were reported by doctors.
As early as 2006, according to filings Stryker made with the FDA, the company had been made aware of problems among patients in whom the bone products had been mixed. Those problems ranged from minor irritation to infections that required follow-up surgeries.
Moreover, Stryker had recalled one of the products involved in the mixing — a bone-void filler called Calstrux — on Aug. 25, 2006.
A routine FDA recall report covering that time period attributes the recall to “lack of labeling precautions.”
“Calstrux should not be used in combination with other products and the volume used should approximate the size of the defect. Adverse reactions have been reported with over filling the defect site or combination product usage, including localized induration, swelling, inflammation, wound drainage, infection and device migration,” it states.
It is unclear whether that recall extended to all batches and whether it later was reversed.
In a sign that the investigation was likely to continue, the government stipulated in the pleas that each former Stryker Biotech sales rep must fully cooperate with prosecutors going forward. Each agreed to “testify truthfully and completely before any grand jury, and at any hearing or trial,” their letters state.
In another indication that the case may continue for a while, sentencing in each case was set for months after the guilty pleas. Martin pleaded guilty Nov. 18 and is scheduled for sentencing May 13. Demming pleaded guilty Feb. 10 and is scheduled for sentencing June 3.
Prosecutors agreed to ask sentencing judges for leniency in return for the defendants’ cooperation.
While none of the court papers related to the guilty pleas from Martin and Demming mentions Stryker by name — the documents refer to the company by a pseudonym — other details contained in government filings make it clear the employer at issue was Stryker. The New York Times reported Friday that Stryker acknowledged the federal probe in an SEC filing.
The guilty pleas of the two men followed an April 25, 2008, warning letter from the FDA criticizing Stryker Biotech for failing to obtain permission before initiating a clinical investigation into whether the two putty-like bone materials (called implants) should be used in tandem.
In a January conference call with analysts, Stryker Corp. Vice President of Strategy and Investor Relations Katherine Owen mentioned compliance letters from the FDA and said the company was “galvanizing the organization around moving toward excellence in compliance.” She did not mention Stryker Biotech by name.
Tim McLaughlin contributed to this article.