Nine Minnesota physicians allegedly received kickbacks and illegally marketed a popular Medtronic product used in spine surgery, according to a federal whistleblower lawsuit recently made public.

The lawsuit, filed last year by two former employees of Medtronic Inc.'s spinal products division, alleges that they and more than 100 other physicians and physician groups nationally received improper payments to buy and promote "Infuse Bone Graft." The suit also states they marketed the product for uses not approved by regulators.

Medtronic, based in Fridley, is not a defendant, though it has been in other lawsuits that made similar kickback allegations, but which were settled out of court or dismissed.

The Minnesota spine surgeons named in the suit are Drs. Timothy Garvey, Francis Denis, Joseph H. Perra, Manuel Pinto, James Schwender, Ensor Transfeldt and Amir Mehbod of Twin Cities Spine Center, and David Polly at the University of Minnesota. A Minnesota neurologist, Dr. Stanley Skinner, is also on the list.

"Our clients categorically deny those allegations," said John Lundquist, a Minneapolis attorney for the physicians. "A great number of physicians in the case do not even use Infuse and have not consulted on Infuse but have consulted with Medtronic on other products."

Infuse is one of the best selling products in Medtronic's spinal biologics division, which brought in $815 million of the company's $13.5 billion in revenues last year.

Medtronic declined to disclose sales for Infuse.

"Infuse is a revolutionary and safe product, when used within its current product labeling," said Medtronic spokeswoman Marybeth Thorsgaard. "Medtronic does not promote off-label use."

Growth agent in a cage

Infuse is used to fuse spinal vertebrae. It consists of a sponge soaked in a genetically engineered growth agent that is inserted in a small, metallic cage, which is then implanted between vertebrae to fuse them together. Before its introduction, surgeons used bone taken from patients' hips, which required two surgeries.

The lawsuit cites safety concerns raised at an FDA Advisory Committee about whether Infuse might promote uncontrolled bone growth around the spine if used off-label.

In July the FDA warned surgeons it had received reports of life-threatening complications linked to using Infuse on the cervical spine near the neck.

Since it was approved in 2002, Thorsgaard said, the rate of complaints to the FDA was less than one-tenth of 1 percent of all units sold.

The FDA approved Infuse for use in the lower back. However, as with many other devices and drugs, physicians use it for purposes not specifically approved by the FDA. That is not illegal.

However, it is illegal to market or promote a medical product for off-label use, one of accusations in the whistle blower suit.

Not the first time in court

It is the third such suit involving Medtronic's spinal products. In 2006, the company agreed to pay $40 million to settle a previous whistleblower case filed in U.S. District Court in Memphis, Tenn., but without admitting wrongdoing. That suit alleged illegal marketing for Medtronic spine products and sought refunds for the federal government for Medicare and Medicaid payments.

A second lawsuit was filed against Medtronic by Jacqueline Kay Poteet, a former employee of Medtronic's spinal division -- Medtronic Sofamor Danek U.S.A. Inc. -- against Medtronic in U.S. District Court in the Western District of Tennessee. That suit alleged that between 1998 and 2003, illegal kickbacks such as travel junkets, sham consulting and royalty agreements were showered on doctors. However, the government declined to intervene and the suit was dismissed.

Suit targets physicians, groups

The whistleblower suit unsealed recently was also filed by Poteet and another ex-employee, Bobbie Vaden, in 2007 in federal District Court in Massachusetts. This time it targets 120 physicians and physician groups, and 16 medical device distributors, but not Medtronic. The government has again declined to intervene and the case is pending.

The lawsuit alleges the physicians received sham consulting fees, bogus royalty payments, research grants and fellowships, free travel and other gifts to buy and promote Infuse, including off-label uses. These actions, the lawsuit alleges, caused other physicians to submit claims to Medicare that were ineligible for reimbursement, or false claims.

Besides the nine Minnesota physicians, Team Spine Minnesota, a Medtronic distributor in St. Louis Park, is also a defendant.

Poteet worked for Medtronic's spinal unit for eight years until 2003 and was senior manager for travel services. She oversaw a $10 million annual budget for employee and physician travel.

Andrew Carr, the Memphis-based attorney for Poteet and Vaden, declined to comment on the case.

Lundquist, who represents 82 of the defendants, declined to say if his clients had indeed received the consulting fees detailed in the lawsuit. The sums ranged from tens of thousands to hundreds of thousands of dollars.

It's a common practice in the device industry for surgeons to contribute to the design of new products, to lecture about them and train other surgeons to use them. Surgeons are compensated at an hourly rate based on what they would make as neurosurgeons and orthopedic surgeons, said Lundquist.

"All payments to our clients are appropriate and based on services rendered," he said.

Staff writer Janet Moore contributed to this report. Chen May Yee • 612-673-7434