Medtronic has pulled one of its most controversial products, Infuse Bone Graft, off the market in Australia as regulators there investigate why the company was widely selling it without a required safety component.

The market withdrawal happened after a former Medtronic employee told regulators that the Minnesota-run medical device company sold Infuse's bone graft component without the titanium LT-Cage device designed to hold it in check.

Medtronic spokesman Ben Petok said the company's withdrawal of Infuse from Australia in March had nothing to do with safety problems. The company hopes to return when it receives approval for more uses.

A consultant for Private Healthcare Australia (PHA) — which represents private insurance funds that pay for 85% of spinal fusions in the country's hybrid public-private health system — confirmed the whistleblower's charge.

"There has never been an LT-Cage funded by one of our [private] health insurance funds in the 14-plus years Infuse was sold in Australia," PHA consultant Craig Moy said.

PHA estimated Australian insurers have paid Medtronic at least $350 million for Infuse since 2006.

The group said almost none of the money has gone to pay for the product's only approved use: fusing two vertebrae at the bottom of the spine. Regulators are probing the device's safety and marketing.

Medtronic denies any wrongdoing in its Australian marketing.

"Medtronic policies and training expressly provide that the company and its employees promote our products only for those uses consistent with the labeling approved by the appropriate regulatory authority," Petok said.

However, the device maker has long argued that it is legal and ethical for doctors to use the Infuse drug off-label.

In the U.S., off-label marketing and injury complaints triggered seven government investigations of Infuse, more than 7,000 patient lawsuits and nearly a half-billion dollars in legal settlements. Despite the controversy, the product has remained on the market, even as studies show its use is predominantly off-label. The company has never admitted wrongdoing.

In Australia, Medtronic acknowledges that the LT-Cage is sold separately from Infuse.

"The LT-Cage is only sold when a surgeon chooses to use it," said Petok, who declined to say how many of the cages have been sold in Australia. "Whether a surgeon chooses to use the LT-Cage is a clinical decision made by the surgeon based on patient anatomy, pathology and treatment plan without Medtronic's involvement."

The cage stops bone from growing in the spinal canal and damaging nerves. Known as "heterotopic ossification," such growth has long been one of the key risks from using Infuse.

PHA said the whistleblower charged that Medtronic never "launched" the LT-Cage in Australia. He also said Infuse is used outside of the spine and at other levels of the spine than the bottom two vertebrae.

"This is where I believe it becomes unethical," the whistleblower said, according to PHA.

Like in the U.S., doctors in Australia have the right to use medical devices any way they think can help their patients.

"It is important that both patients and clinicians who use medical devices off-label are aware of the potential harms, understand that there is no regulatory oversight on these occasions, and have undertaken their own risk assessment," said a spokesman for Australia's Therapeutic Goods Administration (TGA), which regulates medical devices.

Insurance-reimbursement records show that off-label use of Infuse has raised revenue for Medtronic. From 2010 to 2019, Moy said, private insurance funds paid roughly $212 million for 84,782 doses of Infuse. He estimates total use in all years by all public and private payers cost more than $350 million.

Dr. Benjamin Taylor, an orthopedic surgeon at OhioHealth Grant Medical Center, said substantial unstudied off-label use raises concerns, though.

If any device "is used 95% of the time off-label, the cases are there to be studied" for additional approved uses, Taylor said. "If that doesn't happen, I would be concerned ethically about the company."

The government opened its investigation into Medtronic's "safety and supply arrangements" for Infuse in February after receiving the whistleblower's complaint, TGA said.

Medtronic pulled Infuse from the market in March, citing what the company called "the evolution of clinical practice" in Australia.

Infuse comprises a notable part of Medtronic's spine-device portfolio.

Geoff Martha, who was promoted to Medtronic CEO in April after running the division that makes Infuse, has not mentioned the Australian Infuse situation to investors in either of the company's earnings calls since the company pulled the product. Financially, the situation may not be material to a device company expected to take in $29 billion in global revenue this year.

In the United States, Medtronic has paid at least $476 million in Infuse-related legal settlements to patients, investors, and state attorneys general. In 2012, the company paid $85 million to investors who accused the company of misleading them and failing to reveal that more than 85% of Infuse's use was off-label, at a time when the U.S. government was probing off-label use.

Clinical studies have found that Infuse can introduce problems not seen with traditional methods of fusing vertebrae.

In 2013, two independent teams of researchers reviewed Medtronic's published Infuse data and concluded the product "has no proven clinical advantage over bone graft and may be associated with important harms."

Jim Spencer • 202-662-7432

Joe Carlson • 612-673-4779