UPDATED: Humana files RICO suit against Medtronic over Infuse bone graft
|Infuse Bone Graft/LT-Cage Lumbar Tapered Fusion Device|
The Infuse Bone Graft continues to be a pain in the back for Medtronic ($MDT). Health insurer Humana filed a May 30 lawsuit against the device giant for providing misleading information about the bone graft, MassDevice reports.
The lawsuit cites the Racketeer Influenced & Corrupt Organizations statute and was filed in Tennessee Western District Court.
"Defendants paid for and sponsored publication of academic and peer-reviewed literature that falsely represented Infuse and [recombinant bone morphogenetic protein-2] as safe and effective for uses not approved by the Food & Drug Administration. Defendants knew or should have known that Humana would rely on the fraudulent literature to pay for Infuse and/or BMP," says the lawsuit, according to MassDevice.
"Defendants also aided and facilitated hospitals and physicians in obtaining payments from Humana through false statements and fraudulent omissions and concealment to obtain insurance payouts where Infuse and/or BMP was used. Humana would not have paid for such claims had it known the true facts regarding the uses of Infuse and/or BMP or the risks and efficacy of such uses," the suit continues
"Medtronic vigorously disagrees with any suggestion that the company improperly influenced peer-reviewed published manuscripts. Medtronic does not compensate physicians for the use or endorsement of our products, and disagrees with any suggestion to the contrary," the company said in a statement. "The claims in this case are baseless. The potential risks and benefits of Infuse Bone Graft have been described in the product labeling since 2002, and all payers had access to that information. Medtronic stands behind Infuse Bone Graft and will continue to vigorously defend the product and our actions in court."
The Infuse Bone Graft can be used in the treatment of degenerative disc disease in the spine, tibia fractures and dental procedures, according to Medtronic. The company says it has been used by more than one million patients since winning FDA approval in 2002.
Lawsuits are taking a toll on the Medtronic's bottom line. The company just agreed to fork over $9.9 million to settle government claims that it paid doctors to implant its pacemakers and defibrillators. And in the previous quarter its earnings plunged 54% year-over-year due to a one-time, pretax $746 million litigation charge. The vast majority of the charge related to the settlement with Edwards Lifesciences over the company's CoreValve TAVR, but it included $22 million for the settlement of product liability claims related to Infuse.
Indeed, Infuse has long been a source of controversy. In 2012 Medtronic agreed to pay $85 million to settle a shareholder class action lawsuit brought forth by the Minneapolis Firefighters' Relief Association alleging that the company failed to reveal that a large proportion of the bone graft's sales came from off-label uses. In June 2013, another shareholder lawsuit about Infuse was filed, according to Law360.
The Senate Finance Committee also got involved. It issued an October 2012 report which found that "without public disclosure of their roles, Medtronic employees collaborated with physician authors to edit--and in some cases, write--segments of published studies on its bone-growth product Infuse."
To counter safety concerns, Medtronic agreed to submit Infuse data to the Yale University Open Data Access project, which examined the results of 17 trials on more than 2,000 patients in two separate reviews. But the company didn't get the results it wanted. The reviews found that the spinal implant performs no better than traditional bone grafts and carries an increased risk of cancer, sterility and other side effects.