Insurance Company Files Racketeering Claim Against Medtronic

By Jof Enriquez,
Follow me on Twitter @jofenriq

Insurance company Humana recently filed racketeering charges against Medtronic for allegedly giving payouts to surgeons to promote off-label use of the company's bone growth product in medical journals. The insurer said that it unnecessarily paid for Infuse bone-graft treatments when less expensive therapies should have been used, based on established medical guidelines.

Humana is seeking unspecified compensatory and punitive damages from Medtronic's misrepresentations, fraudulent concealment and omissions, and violations of the Racketeer Influenced and Corrupt Organizations (RICO) federal statute and consumer protection acts in all 50 states, according to a Business Week article.

In its filing in U.S. District Court for the Western District of Tennessee, Humana cited a 2012 U.S. Senate report which said that between 1996 and 2010, Medtronic paid $210 million in consulting, royalty payments, and other fees to doctors who were involved in studies sponsored by Medtronic. According to a Wall Street Journal report, Humana alleges in the suit that Medtronic was "conspiring with prominent physicians to promote unapproved uses of its bone-growth drug."   

Humana alleges that doctors were paid to vouch in published studies for the safe use of Infuse in neck and spinal procedures that are not allowed by the U.S. Food and Drug Administration, according to the WSJ article. Humana claims that Medtronic used "sophisticated and deeply deceptive marketing strategy" to promote its product and induced orthopedic surgeons to downplay risks while touting benefits, a Reuters report said.

In a statement, Medtronic responded to the allegations by saying that it paid doctors for intellectual property rights and consulting services, and that there was no conflict of interest.

"Medtronic vigorously disagrees with any suggestion that the company improperly influenced peer-reviewed published manuscripts," Eric Epperson, a company spokesman, said in a statement e-mailed to the Journal. "Medtronic does not compensate physicians for the use or endorsement of our products, and disagrees with any suggestion to the contrary."

According to the WSJ, Medtronic said potential adverse events involving Infuse have been reported to regulators and are reflected in product labels since its approval in 2002.

Infuse, a bone growth stimulator used in spinal fusions for lumbar degenerative disc disease, has been the subject of scrutiny in recent years because of questions surrounding its off-label safety record. The Senate report in 2012 revealed the multimillion dollar payouts and concealment of safety problems during clinical trials by Medtronic. Last month, the company, without admitting wrongdoing, agreed to pay $22 million to settle product liability cases involving their bone growth product.