Sunday, September 28, 2008

Medtronic Whistleblower Files Suit Against Physicians

Medical device maker Medtronic settled a whistleblower lawsuit in 2006 by agreeing to pay $40 million while admitting no wrongdoing. In that complaint, Medtronic allegedly gave surgeons incentives to use its products, including entertainment at strip clubs and paying for lap dances.
That suit claimed that Medtronic, one of the largest medical device makers in the USA, made payments of $50 million in just four years to physicians doing implant surgery. One surgeon in Wisconsin was paid$400,000 for 8 days of "consulting" work. A surgeon in Virginia was compensated with nearly $700,000 in fees for nine months of work in 2005.

Now the same whistleblowers have filed against 100 spine physicians and the suit claims they received unwarranted Medicare money and kickbacks from Medtronic to use their devices. Plaintiffs and former employees, Jacqueline Kay Poteet and Bobbie Vaden, accused more than 130 orthopedic spine surgeons, neurosurgeons, medical practices and distributors of taking kickbacks from Medtronic for using their products, promoting off-label use of FDA-approved medical devices and filing Medicare claims in violation of the False Claims Act, among other things.

The whistleblower is Ami P. Kelley, a former senior legal counsel for the company’s Memphis, Tenn. based spinal products division. The lawsuit describes boondoggles like the “Alaska Think Tank,” a five-day-all expense paid trip to Alaska where doctors were supposed to present case studies to each other. Instead, there were no prepared presentations and the physicians drank and partied together. Medtronic paid for another trip to the Ritz-Carlton in Cancun, Mexico for physicians and their families. Participants were offered free golf, tours of Mayan ruins and parasailing. Similar education events were held in New Orleans and the education was described as being “light on content” but heavy on Mardi Gras drinking, partying and beads.

Minneapolis medical device industry attorney Mark Duval says, “this is a sour grapes lawsuit by two qui tam relators who apparently didn’t get any money when the government settled the first case against Medtronic for $40 million. So they are taking another bite at the apple and sticking it to Medtronic by going after their physician customers.”

In its web site response, Medtronic said employees follow the company’s ethical standards in all arrangements with physicians, including consulting and service agreements and appropriate travel and entertainment.

The former Medtronic employees, who brought the lawsuit, allege that the amount of the “consulting fee” paid by Medtronic to each physician is directly related to the gross purchase of spinal implants made by each physician. They also claim that the devise “INFUSE” (a bone graft), was used for off-label (not FDA approved) use at least 75% of the time. While not illegal for the physician, the FDA does prohibit companies from marketing off-label use of drugs or devices. Medtronic spinal division revenue is over $2 billion annually.

This is one of the first lawsuits that target this many physicians. Devise industry attorney Duval says, “This is a wake up call to the medical community that they have to take compliance seriously. Physicians and their medical societies and clinics and institutions will demand more scrutiny over relationships and will, in some cases, not allow physician/industry collaborations.”

The shake up is just beginning.


ERP said...

This is nauseating. And I sometimes feel a little guilty eating the free Pizza the drug reps bring us once or twice a month when they give their spiel!

Cecilia said...


I go to med school in Medtronic's homeland. They're literally everywhere. This news makes me ill.

Comment on the poll: One of the things I like about this blog is that it's ad-free, so I don't have annoying things flashing in my peripheral vision and slowing my load time. I know ERP has ads on his, and I specifically read him in Google Reader to avoid them. So my vote against ads isn't really a question of purity -- It's pure self-interest. :-)

Quiact said...

Advice from a big pharma whistleblower:

The realtor should learn all they can about law and strategy relevant to the case they are preparing to file.

My degree is in Psychology, and I never took a law class in my life- or ever utilized an attorney until this. It will be to their benefit.

Anything in writing is golden. the whistleblower should collect documents that are even the least bit concerning as they collect evidence.

There is burden of proof, and preponderance of evidence. Documents are the key.

With pharmaceutical whistleblower cases, they should be filed at the U.S. Attorney offices either in Boston or Philadelphia.

These two locations out of the close to 100 USDA offices in the U.S. stand the greatest chance of success.

Learn about the media, and those journalists who are critics of your industry. The whistleblower should attempt to befriend them.

If the whistleblower case is not intervened by the DOJ, it's more or less dead at that point.

The media can be plan B.

Disclose your evidence you presented to prosecutors of the government to those who will publish the evidence.

Acquire legal counsel that has successful experience in the whistleblower case you are filing. You can locate them on the internet.

Also, have the legal counsel of the whistleblower take your case as a whistleblower on complete contingency. Meaning, the legal agents don't get a dime from you unless there is a settlement.

Make sure the whistleblower's legal counsel does not have another client who is a whistleblower of the same industry as themselves. This has happened, and it is legal malpractice.

The whistleblower should be patient, but persistent. There is a pathologically intimate relationship between the corporations and our government.

The whistleblower must insist on justice and prosecution. Clearly, they do, or they would not have chosen to blow the whistle. said...

It cannot have effect in reality, that is what I think.