Medtronic continues to endure a public relations pounding related to its InFuse bone graft product. This week a professional journal slammed the company and researchers Medtronic paid for studies that failed to disclose serious complications connected to InFuse.
Safety, ethical and legal concerns have dogged InFuse and Medtronic for years, and drawn the scrutiny of U.S. Senators, prosecutors, the FDA and other watchdogs.
The history of InFuse -- or at least a critic's version of it -- is laid out in a 2008 shareholder lawsuit filed against Medtronic. The investors allege Medtronic hid the fact that InFuse's sales were largely driven by so-called off-label uses. Simply put, doctors were exercising their authority to use the genetically-engineered bone protein in ways they thought were safe even though the methods lacked FDA approval.
"The reason why doctors saw fit to use the product off-label was because of heavy promotion activity from the company," said Salvatore Graziano, who was lead counsel in the shareholder lawsuit. "The FDA actually approved InFuse for a very, very narrow application because of concerns for serious side effects."
Medtronic's marketing efforts led to skyrocketing sales of InFuse, Graziano said.
"It had a dramatic ascent, fueled almost entirely by off-label applications. The amount of off-label use of the product at its peak was 80, if not 90 percent of the use."
InFuse came out of Sofamor Danek Group, a Tennessee-based spinal device maker.
Medtronic bought Sofamor Danek in for $3.6 billion in 1999. A few years following, the FDA approved the bone graft product for limited surgical applications. The gel became increasingly common in spine surgeries.
Eugene Carragee, a professor of orthopedic surgery at Stanford University, is one of several doctors who authored a scathing review of InFuse published this week.
"In 2002 it was around 1 percent of spine fusions and by 2007, it was close to 35, 40 percent of spinal fusions," Carrage said.
Thirteen InFuse studies that Medtronic helped pay for omitted any mention of serious side-effects, such as sterility in men and associations with cancer and dissolving bones, Carragee said.
Sofamor Danek's business practices ended up drawing the attention of the U.S. Department of Justice.
The government alleged that between 1998 and 2003, Sofamor Danek and Medtronic paid kickbacks to doctors to encourage them to use its spinal products. In July 2006, Medtronic agreed to pay the United States $40 million to settle the allegations.
Some observers suggest Medtronic could blame Sofamor Danek for the ethical problems. But that doesn't wash, said Dave Heupel, portfolio manager for Thrivent Financial for Lutherans.
"This is a Medtronic product. They're responsible for it," Heupel said. "They benefit from it doing well and they're going to suffer the consequences from any impropriety that may be unearthed."
In July 2008, the FDA issued a warning letter about off-label use of the protein in InFuse. The agency said there had been reports of life-threatening complications associated the protein.
The warning unnerved doctors and cut into InFuse's sales, Heupel said. With a major professional journal panning InFuse this week, Heupel believes the product is headed for further decline in sales, which have already fallen by nearly 20 percent, to $750 million a year.
The company's critics say InFuse, when used correctly, can be a useful product.
"It's not exactly mother's milk. The sadness has been that it's been promoted as such a benign substance and that really hasn't been the case," said Charles Burton, a St. Paul neurosurgeon and spine specialist.
Medtronic declined an interview request for this story but has said it "strongly believes" in the safety of InFuse for approved uses and stands behind safety data the company submitted to the FDA. New CEO, Omar Ishrak said integrity and patient safety are his highest priorities.