Investigation eyes Medtronic Spine, kickback allegations
An international journalism investigation of the medical device industry describes dangerous devices, kickbacks to doctors and weak regulations – and shines a spotlight on a medical company with a big presence in Memphis.
That company is Medtronic, which has its main operations in Minneapolis and annual sales of about $30 billion.
One of its units, Medtronic Spine, is based in Memphis and employs about 1,500 people here.
Medtronic Spine sells a product called Infuse that promotes bone growth. The government has approved Infuse for a limited number of uses, including in lower back spine fusion surgeries.
But former employees and a Senate investigation said Medtronic pushed doctors to apply Infuse for “off-label” methods not approved by the U.S. Food and Drug Administration, including surgery in the neck bones. Deaths and injuries have been associated with the neck surgeries.
Details of the long-running Infuse af-
fair and other Medtronic controversies are included in the “The Implant Files,” a series of news stories published by the Washington-based International Consortium of Investigative Journalists, or ICIJ, and its partners around the world.
“It is important to note that the ICIJ reporting on Infuse bone graft covers historical issues that have been thoroughly covered in the past,” Medtronic spokesman Victor Rocha said in an email.
Rocha also referred to Medtronic’s detailed responses to the ICIJ project, whichsays Medtronic sales staff aren’t allowed to push off-label uses.
Another section says: “At Medtronic, safety is our first and foremost priority and we reject any suggestion that Medtronic puts ‘innovation and profits’ over safety.”
The company also said the ICIJ reporting may cause “unnecessary alarm and confusion among patients and health care providers.”
In Memphis since 1999
Medtronic has had a major presence in Memphis since it bought the company Sofamor Danek in 1999.
Medtronic doesn’t manufacture spine surgery products in Memphis, but handles other functions related to them, including research and development, regulatory and clinical matters and marketing, Rocha said.
Kickback allegations
Medtronic pledged to the federal government in 2008 to never pay bribes to doctors or others, according to ICIJ reporting. But the ICIJ report says evidence suggests the company repeatedly violated the 2008 pledge – citing among other things a 2015 government settlement related to kickbacks to doctors to use spine stimulators off-label.
The article also concludes patients have suffered and died as a result of unsafe practices.
“It’s a successful business model that Medtronic follows, even if it damages patients,” says one advocate quoted in the article, Dr. Charles Rosen.
The FDA issued a warning in 2008 that use of Infuse and a competing product in neck fusion surgery could lead to serious problems in swallowing, breathing or speaking.
Infuse is sold as a powder that’s mixed with sterile water and injected into a sponge. The sponge fits into a cage that the surgeon places into the patient’s body. In spinal fusion, Infuse promotes bone growth that welds spinal bones together.
The ICIJ story features people such as Shirley Nisbet, who died in California shortly after that 2008 warning when a doctor used Infuse in her neck. A lawsuit related to her death was dismissed.
Former Medtronic employees have alleged the company aggressively promoted off-label use of Infuse by giving incentives to doctors.
Those legal claims were dismissed, but the U.S. Senate launched an inquiry.
In 2012, the Senate finance committee issued a report of more than 2,000 pages on Infuse. Among other things, it says Medtronic paid about $210 million to doctors, helped edit and write their scientific journal articles about Infuse, and tried to hide information about bad results.
Medtronic posted a web page dedicated to the Infuse questions. It reads in part: “Infuse has been tested for safety and efficacy in numerous preclinical studies. Clinical data likewise demonstrates the safety and efficacy of Infuse.”
In response to the kickback allegations, Medtronic has said it follows ethical rules, and that it must work with doctors and other experts to make safe products.
“In accordance with our Global Business Conduct Standards, Medtronic compensates experts for their time and expenses, not to endorse or promote Medtronic’s products,” according to the Medtronic’s website.
Fallout unclear
It’s unclear what impact the global reporting will have on sales and legal fees for companies in Memphis. The city holds second place in the orthopedic medical device industry, which makes products such as artificial hips and knees.
The orthopedic industry’s number one spot in terms of employment is Warsaw, Indiana, a small town that happens to be headquarters to major companies.
A total of 41 medical device companies employ 6,500 people directly in the Memphis area, said Roy Smith, executive director with the Greater Memphis Medical Device Council. Suppliers to those companies employ several thousand more,
“It’s one of these best-kept secrets,” Smith said. “A lot of people don’t know how important and how big it is and how many people are employed by it.” Early this week, he said he wasn’t aware of the ICIJ reporting.
The industry has faced scrutiny before. Other companies with a big Memphis orthopedic presence, including Smith & Nephew and Wright Medical, have likewise faced various federal kickback investigations and product lawsuits over the years and paid millions to settle them.
Infuse off-label use reportedly still common a decade after FDA warning
About 10 years have passed since the FDA issued the warning about complications related to off-label use of Infuse for surgery in the neck.
In July, Medtronic agreed to pay $43 million to settle a shareholder lawsuit related to Infuse. Medtronic denied wrongdoing. It was one of the last major legal claims related to the product, according to the Minneapolis Star Tribune.
Yet the Star Tribune reported that surgeons were still using the product in potentially dangerous off-label ways.
Coverage around the world
The ICIJ is best known for publishing the Panama Papers, an investigation into offshore finances that’s led to ongoing shakeups in governments from Pakistan to Iceland.
An estimated 250 people in 36 countries contributed to the medical device project.
Organizations including The Irish Times, The Indian Express, Mexico’s Milenio, Argentina’s La Nacion and Germany’s Sueddeutsche Zeitung all ran versions in recent days.
Some of the stories describe numerous other controversies involving Medtronic, including a $4.4 million settlement in 2015 of a federal investigation that alleged it imported spinal devices from Asia, then relabeled them as made in Memphis. The company admitted no wrongdoing.
Reach Daniel Connolly at daniel.connolly@commercialappeal.com.