Lawsuit against Medtronic questions the company's handling of spinal device

Medtronic faces a federal false claims and misbranding lawsuit that accuses the company of designing products for one purpose but tricking the U.S. Food and Drug Administration (FDA) into approving them for another to avoid expensive and time-consuming safety testing.

The suit, by a former Medtronic sales representative, alleges that the company designed a family of spinal devices for the neck but told the FDA they were to be used only in the chest and lower spine, where they were almost always too small to work.

In court documents, Medtronic denied the allegations, saying it developed the product in different sizes to accommodate patients' anatomical differences. The company has asked a federal judge to dismiss the suit.

Medtronic recently settled a suit making many of the same charges in a California state court. The company admitted no wrongdoing. The settlement amount was undisclosed.

Like the state case, the federal suit raises questions about the FDA approval process, which lets device makers sell products if the FDA deems them "substantially equivalent" to devices the government has already approved for sale. The suit also raises questions about the ability of device makers to market products for non-FDA approved uses, a practice known as off-label promotion.

Doctors are allowed to use medical devices in any way they think will help patients, but federal law prohibits misbranding and some kinds of off-label promotion. Balancing patient safety with free speech has grown so contentious that the FDA will conduct two days of hearings this week to consider "manufacturer communications" about "unapproved uses" of products.

Brian Shapiro, a former Medtronic salesman, brought the federal suit as a whistleblower on behalf of himself and the United States, 31 states, including Minnesota, and the District of Columbia. The federal False Claims Act lets private citizens who believe they have proof of fraud against the government sue and collect a portion of any settlement, even if they have not been injured.

The U.S. government has "declined to intervene in the case at present," but "remains a party for service, must be notified of all filings and discovery in the case, and reserves the right to intervene at any point in the future," John Parker, one of Shapiro's lawyers, said.

In an e-mail, Medtronic spokesman Eric Epperson said the company has "no reason to think the government will reverse its decision not to intervene."

The case, which is progressing like a private suit, injects a new element into the discussion of off-label promotion. The suit alleges that Medtronic designed some of its Verte-Stack vertebral replacement devices to fit in the neck but put labels on them that said they should not be used there.

This, the suit alleges, convinced the FDA to approve the Verte-Stack devices as equivalent to products for the chest and lower back and let Medtronic avoid spending tens of millions of dollars and years waiting for the results of safety tests.

Meanwhile, the suit alleges, Medtronic convinced doctors to use the devices almost exclusively off-label in the cervical spine and reaped hundreds of millions of dollars in revenue — including government payments from Medicare and Medicaid.

Observers say the allegations present a unique twist in the legal battle over off-label promotion.

"This is a novel theory," said Seth Whitelaw, CEO of Whitelaw Compliance Group, which specializes in regulatory matters involving medical technology, and an adjunct professor at Mitchell Hamline School of Law. "I think this is a good case to keep your eyes on to see where it goes."

An FDA spokeswoman did not specifically address approval of the Verte-Stack devices but said in a statement that vertebral replacement devices need only fit in the top chest-level vertebra to be approved for use below the neck, even if they are "considerably smaller than ... the larger lumbar vertebral body."

The spokeswoman said "FDA reviews ... all devices, based on the indications for use submitted and proposed by the manufacturer."

Medtronic says in its motion to dismiss that Shaprio's litigation is an "outgrowth" of the suit the company recently settled in a California state court for an undisclosed amount. The plaintiff in the state case, patient Jerome Lew, alleged many of the same things as Shapiro.

Medtronic called Shaprio's suit a "rambling" attempt "to shoehorn a disparate series of allegations ... into a False Claims Act cause of action" that "does not fit." The company says the devices were properly approved for vertebral replacement in the "thoracic and lumbar regions of the spine," an area stretching from the upper to the lower back, but not the neck.

Medtronic says it developed the devices in "different sizes and heights to ensure a surgeon can match the implant to the patient's anatomy."

The company also says it did not defraud the FDA or Medicare and Medicaid.

Medtronic asks to have the suit dismissed on several grounds. These include doctors' ability to use medical devices any way they think will help patients. Medtronic also argues that devices considered misbranded under the federal Food, Drug, and Cosmetic Act are not automatically excluded from Medicare and Medicaid reimbursements.

Medtronic says Shapiro failed to specify the "who, what, when, where and how of a consistent course of fraudulent conduct" and, in any event, is barred by a statute of limitations from suing.

Whitelaw believes Medtronic "has the stronger case" given the state of the law.

If the FDA does not move against Medtronic for misleading the agency, Whitelaw explained, then the argument that the device approvals are invalid will be difficult to make. Instead, there would be "approved devices with an unapproved indication."

Eric Campbell, research director at the Mongan Institute for Health Policy at Harvard Medical School, said many companies have a strategy of pushing off-label uses of devices once they receive narrow FDA approvals.

"The marketing plan is to get something approved for any use and then market it off-label," Campbell said. If a company gets sued, he added, it will usually have collected revenue that is many times the amount of what it eventually pays in settlements or fines.

Lisa McGiffert, who directs the Consumers Union's Safe Patient Project, declined to take a position on Shapiro's suit, but she said the FDA's review system is supposed "to ensure that new medical implants do what they claim to do and don't harm patients."

"It is up to the court to determine whether Medtronic sidestepped that process," McGiffert said.

Jim Spencer • 202-662-7432