Will the Sunshine Act Shed Light on Medtronic Infuse Bone Graft?

Washington, DCIt’s probably safe to say that Medtronic isn’t too happy that the federal law required compliance from healthcare companies regarding the Physician Payment Sunshine Act as of August 2013. In a nutshell, this means that the medical device company will need to disclose payments it makes to doctors when using Medtronic Infuse Bone Graft.

The Sunshine Act means full disclosure. And full disclosure is intended to bring the pharmaceutical industry’s “influence-peddling out from the shadows,” said Senator Kohl back in 2007, at a hearing to examine the financial relationship between physicians and the pharmaceutical industry. Kohl pointed out that the industry spends an estimated $19 billion annually on marketing to physicians in the form of gifts, lunches, drug samples and sponsorship of education programs. Drug companies in return effect the drugs and medical devices that doctors use.

Senator Grassley said “Patients, of course, are in the dark about whether their doctor is receiving this money.” The law was finally passed thanks to companies such as Medtronic. According to the Senate Finance Committee’s investigation of Medtronic, the medical device company paid doctors a whopping $210 million in royalties and consulting fees. “Infuse is an example of what this is aimed at,” said Senator Grassley.

Grassley asked Medtronic to explain the payments made to surgeons since 2003, as well as the company’s funding of organizations involved in continuing education programs for surgeons. According to the New York Times (September 27, 2007), Medtronic paid spine surgeon Dr. Hallett Mathews $300,000 during 10 months of 2006, and another $700,000 in 2005. In January 2007, Dr Mathews became vice-president of medical affairs for Medtronic’s spinal unit…

Back in July 2006, Medtronic agreed to pay $40 million to settle allegations that its subsidiary Sofamor Danek, which makes implants used in spine surgery, paid kickbacks to doctors through sham consulting contracts, royalty payments and lavish trips to tourist locations. But Medtronic still conducted business as usual. One complaint claimed that Medtronic paid doctors more than $50 million in kickbacks over a four-year period. And one Wisconsin physician signed a 10-year $400,000 consultant contract with Medtronic in 1998, which only required him to “consult” for eight days a year.

Medtronic has, or rather did have, very deep pockets.

Fast-forward to 2013. The Justice Department is continuing to investigate Medtronic’s Infuse Bone Graft’s use for procedures beyond those approved by the FDA. Research indicates Infuse is used off label in about 85 percent of cases.

In a recent Infuse Bone Graft injury lawsuit, Judge Brewer ruled that medical device manufacturers are not entitled to liability protection if the manufacturer’s failure to follow federal law results in injury to a patient. Medtronic’s device caused injury after the INFUSE bone graft was used off label in a procedure fusing vertebrae in the cervical spine.

“‘Sunlight is said to be the best of disinfectants’ and is especially true in the area of healthcare,” said Justice Brandeis. “In an ideal world doctors would make medical decisions based solely on their patient's best interests. Unfortunately, in some cases, a doctor’s medical decision is improperly influenced by a medical device manufacturer. Recent Infuse Bone Graft lawsuits have alleged that Medtronic improperly influenced medical decisions.”

At the end of 2013, Medtronic reported that its spinal revenue brought down the overall numbers for the group, largely as a result of legal and safety problems with its Infuse Bone Graft. It saw a 17 percent decline and “expects a continuation of revenue declines.”