Medtronic accused of fraud in insurer's suit over bone-graft product

  • Article by: JEF FEELEY , Bloomberg News
  • Updated: June 2, 2014 - 9:23 PM

Medtronic Inc. was sued by managed-care company Humana for allegedly marketing its Infuse bone-graft product for uses that weren’t approved by regulators and duping the insurer into covering those claims.

Medtronic paid doctors hundreds of millions of dollars to tout the safety and effectiveness of the Infuse product for a variety of spinal surgeries even though the Food and Drug Administration had limited its use to lower-back procedures, Humana said in a complaint filed Friday in federal court in Tennessee.

The suit comes less than a month after Fridley-based Medtronic agreed to pay $22 million to settle 950 suits over Infuse and said it was taking a charge of as much as $140 million to cover litigation costs linked to the product.

Medtronic officials “misrepresented the safety, efficacy and necessity of Infuse through fraudulent studies and peer-reviewed publications,” Humana’s attorneys said. “Humana justifiably relied on the misrepresentations” in paying claims on the product.

Medtronic called Humana’s claims “baseless,” saying the company listed health risks linked to Infuse on the product’s label since it went on sale in the United States in 2002.

“Medtronic does not compensate physicians for the use or endorsement of our products, and disagrees with any suggestion to the contrary,” Eric Epperson, a company spokesman, said in a statement.

Medtronic generated about $900 million in Infuse sales in 2011 alone, according to Louisville, Ky.-based Humana’s complaint. “The vast majority” of Infuse sales were for unapproved, or off-label uses, according to the complaint.

Studies have shown that Infuse, which helps help bones heal after spinal surgery, has been found to pose an increased risk of cancer along with infections and male sterility. FDA officials warned surgeons not to use the product in cervical-spine procedures in 2008 after learning of complications in dozens of patients.

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