Amid recalls, Minnesota medtech exec says she was pressured to disregard safety law

Amid a series of product recalls, executives at a medtech company that makes brain surgery products repeatedly belittled potential safety concerns and pressured its chief quality officer to lie to regulators, a lawsuit in federal court in Minnesota says.

New Jersey-based Integra LifeSciences pressured Susan Krause of Rosemount, the former chief quality officer, to take illegal action so it could keep selling products, the 32-page civil complaint filed in U.S. District Court in St. Paul alleges.

The company denies Krause’s allegations and is trying to move the case to federal court in New Jersey.

Throughout Krause’s nearly three years at Integra, company executives threatened, verbally abused and discriminated against Krause after she refused to disregard potentially dangerous quality issues, the lawsuit says.

Krause witnessed executives “actively engage in a concerted effort to downplay quality-control issues, avoid Food and Drug Administration (FDA) regulations and risk patient safety in violation of multiple applicable laws and regulations,” the lawsuit continues.

Integra, which generates more than $1.5 billion in annual revenue through products used for skin reconstruction and brain surgery, has previously issued recalls and received FDA warning letters.

The lawsuit says Krause is demanding at least $300,000 for the company’s violations of the Minnesota Whistleblower Act, the Minnesota Human Rights Act, as well intentionally inflicting emotional distress and defaming her.

The company last week asked U.S. District Judge Laura M. Provinzino to dismiss counts of defamation and infliction of emotional distress, saying in a legal memorandum that Krause tried to paint the executives as “bad actors.”

“Even taking these salacious claims as true — which they are not — Plaintiff fails to state claims for intentional infliction of emotional distress and defamation upon which relief may be granted,” the memorandum says.

In an email, Integra’s attorney John McDonald said the “allegations made against the company and its executives are without merit, and we intend to vigorously defend against them.”

Krause’s attorney, Jonathan D. Miller, declined to comment beyond the lawsuit.

“To be clear, however,” Miller said, “all of the allegations in Ms. Krause’s detailed complaint are true and accurate.”

Reached for comment, the FDA cited a current temporary pause in its external communications “not directly related to emergencies or critical to preserving health.”

Nasdaq-listed Integra makes medical devices to treat brain tumors, traumatic brain injuries, strokes and other maladies. It also creates regenerative tissue used for wounds, burns and reconstructive surgery.

The FDA issued a warning letter to Integra in March 2019, according to a financial document filed with the Securities and Exchange Commission. The FDA noted in the letter that following a 2018 inspection the company failed to properly test for endotoxins in medical devices manufactured at a Boston facility, a separate shareholder lawsuit filed in U.S. District Court in New Jersey says.

Endotoxins are biological elements that may cause fever, shock and organ failure if they enter the blood.

Bryan Feldhaus, president of food, drug and device law at DuVal & Associates in Minneapolis, said a warning letter is the most significant type of letter the FDA issues. After that, he said, the agency can seize products or force recalls.

Mark Gardner, managing partner of FDA law firm Gardner Law in Stillwater, said warning letters often trigger shareholder lawsuits.

In February 2020, a former Integra executive told investors that the company had worked through “quality remediation efforts throughout 2019″ and said there were no more patient safety issues at the Boston plant, the shareholder lawsuit says.

Krause’s complaint, which contains heavy redactions, alleges safety issues continued. The two parties are arguing in court about whether the full complaint should be unsealed.

After beginning in her role overseeing 600 employees in 2021, Krause “quickly realized that Mr. De Witte and Mr. Schwartz were only concerned about quality control to the extent that it did not affect profit,” her lawsuit says, referring to former CEO Jan De Witte and chief legal counsel Eric Schwartz.

In 2022, De Witte repeatedly pressured Krause to resume sales of a product that monitors intracranial pressure during brain surgeries before the fix for a malfunction was proved effective following a recall. After refusing, Krause’s lawsuit says, she experienced “verbal abuse and hostility from Mr. De Witte as she worked to confirm the ... product was safe.”

Integra’s motion to dismiss says nothing in Krause’s complaint “constitutes a factual allegation which, if true, would establish that Integra intended to cause Plaintiff severe emotional distress or proceeded with the knowledge that emotional distress would likely occur.”

Later in 2022, the company also received a complaint through an internal hotline alleging sterile and nonsterile products were mixed at the Boston site and managers there told workers to ignore potential contamination, Krause’s lawsuit said.

The whistleblower allegedly slid three notes under the Boston plant manager’s door in December 2022 and January 2023 trying to persuade the company to take action.

The whistleblower then sent the complaint to the FDA on Jan. 17, 2023, after Integra failed to address the cross-contamination, the lawsuit continued.

Feldhaus said that, in general, cross-contamination is a concern for medtech companies because it can result in serious injury for a patient.

The FDA conducted an investigation because of the internal complaint in spring 2023, another filing with the SEC said. On April 26, 2023, the company paused production at the Boston facility, saying it expected to receive more bad news, according to the shareholder lawsuit.

Krause’s lawsuit says outside lab results then revealed certain products manufactured at the Boston site contained concentrations of endotoxins 27 times higher than the level detected by internal testing.

“Integra also had become aware of over 80 customer complaints in which patients reported high fevers, inflammation, revision surgical intervention, and infection,” the lawsuit says. “Two complaints also reported meningitis.”

In May 2023, Integra initiated a voluntary global recall of all products manufactured in its Boston facility for the previous five years, according to another SEC filing. The company said in the filing, “there is no specific indication of any reported product complaints related to high endotoxin levels,” and it issued the recall to “implement additional detection and quality controls.”

Around this time, De Witte allegedly asked Krause why she wasn’t willing to violate FDA regulations and said it’s an agency “that ‘blocked common sense,’” the lawsuit says. She allegedly heard a similar statement after refusing to allow the company to illegally relabel inventory, the lawsuit says.

In July 2023, the company received another FDA warning letter. According to SEC filing, the agency required annual third-party audits of the Boston facility’s manufacturing and quality systems for three years, with the initial one to be completed by March 31, 2024.

In December 2023, Integra recalled cranial access kits made in Salt Lake City because of a defect in packaging potentially compromising the sterility of the device, according to an FDA form.

De Witte and Schwartz tried to override a recall for the brain surgery product, Krause’s lawsuit says, and De Witte allegedly told Krause she would withhold her bonus if the recall proceeded.

Krause issued the recall affecting 17,753 kits. She received only 70% of her bonus, her lawsuit says.

De Witte micromanaged Krause, denied her benefits and subjected her to more rigorous scrutiny compared with her male colleagues, the lawsuit alleges.

In February 2024, De Witte said after poor audit performance that a teammate of Krause “should get a bullet in the head,” her lawsuit says. This came around the time the company received a new employee hotline complaint alleging quality issues and the falsification of records at a New Jersey site.

The whistleblower, concerned that Integra was not taking action to protect patient safety, also sent the complaint to the FDA, the lawsuit says.

Pictures allegedly showed employees falsifying records and destroying evidence.

The company fired four employees, Krause’s lawsuit says, but De Witte demanded in March last year that she send a letter to the FDA stating the whistleblower’s allegations were false.

She refused, the lawsuit says, as she knew the facility had “numerous product quality and patient safety issues.”

“Plaintiff refused to do so because that statement would have been false and required her to commit fraud,” the lawsuit says.

That month, Krause resigned. The company later told investors it “made changes to the operations and quality leadership and structure to ensure the right focus and capabilities is applied to Boston.” Since then, she has applied for 121 jobs with no luck.

Gardner said that in general that most companies thoroughly investigate whistleblower complaints and may even hire outside counsel to help out.

The company, Krause’s lawsuit alleges, “undermined [Krause’s] efforts to ensure safety and compliance at every turn.”