A Medical Device Daily

A lawsuit has been filed in the U.S. District Court for Massachusetts against Medtronic (Minneapolis), which accuses the company of purposefully promoting the off-label use of biliary stents to treat cardiovascular conditions, according to the Massachusetts Medical Devices Journal (MMDJ).

"Medtronic is aware of the complaint and intends to vigorously dispute its allegations, including filing a motion to dismiss at the outset of the case," Charles Grothaus, senior manager, corporate public relations at Medtronic, told Medical Device Daily. "We don't comment on any specific allegations, but William Hawkins [chairman/CEO] is well known in the industry for his leadership in advocating and supporting ethical business practices."

According to the MMDJ report, two former Medtronic employees filed what is being labeled a whistleblower suit on behalf of the U.S. government, 22 states and the District of Columbia. The lawsuit alleges that Medtronic retaliated against the two employees – Tricia Nowak, a sales representative, and Enda Dodd, a senior research manager – and fired them after they objected to the off-label promotions.

Late last year several lawsuits against Medtronic, stemming from the October 2007 recall of the company's Sprint Fidelis defibrillator leads, were dismissed (Medical Device Daily, Oct. 29, 2009). Earlier in the year, a Massachusetts district court dismissed a government fraud case that alleged device distributors of giving kickbacks to doctors who used Medtronic products (MDD, April 6, 2009).

The whistleblower claims are brought under the False Claims Act in 2007

In other legal news, Robbins Umeda (San Diego) has begun investigating possible mismanagement of Stryker (Kalamazoo, Michigan).

Robbins Umeda's investigation of Stryker concerns questionable statements issued by the company between Jan. 25, 2007 and Nov. 13, 2008, regarding its business success and profitability as well as whether the company cut corners on its operational costs by failing to document and maintain adequate quality controls over the products it manufactured. Company insiders allegedly took advantage of the stock's 52-week high of $75 per share (split-adjusted) in November 2007, when they sold their personally-held shares generating more than $300 million in proceeds prior to the stock's 52% decline to $36.11 on November 20, 2008, according to Robbins Umeda.

A lawsuit alleging violations of the Securities Exchange Act of 1934 has been filed on behalf of shareholders who purchased or otherwise acquired Stryker stock between Jan. 25, 2007 and Nov. 13, 2008, seeking recovery from Stryker and certain of its officers for the damages they have suffered as a result of the officers' mismanagement of the company. Securities class actions like this can potentially cause additional damage to the company.