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Home » Blogs » BioWorld MedTech Perspectives » Dinner at the end of the Medtronic Infuse story

BioWorld MedTech Perspectives
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BioWorld MedTech

Dinner at the end of the Medtronic Infuse story

May 22, 2012
By Mark McCarty

I consider myself an omnivore, but I never much cared for the taste of crow. All the same, it seems there’s some bird meat on the menu thanks to a blog I posted last year about the problems Medtronic was having with Infuse. On the other hand, I’m not alone. The U.S. Dept. of Justice has a heaping helping of the stuff on its hands.

As I wrote last August, Medtronic agreed to pay Yale University $2.5 million to review adverse events connected with Infuse, a bone morphogenic protein product that had become conspicuous for allegations that adverse events were not reliably reported by clinical trialists. Another problem was that a hefty percentage of consulting fees the firm paid in connection with the product were concentrated in what seemed a small number of doctors. That’s probably not unusual, but it looks bad under the modern med-tech microscope. A much bigger problem, however, was that a large majority of the sales volume was reported to be for off-label use.

The problem hurt Medtronic somewhat financially, including that it lost an $85 million shareholder lawsuit, but its market cap of roughly $39 billion meant the lawsuit was a bigger problem as a distraction than as a subtraction. How much the combination of lawsuit and DoJ investigation affected share prices is tough to say because the story played out over four years, but it couldn’t have come at a lousier time for anyone with a 401(k) invested in MDT.

In all fairness to my posting in 2011, I didn’t say this would kill the company or the product, and I didn’t say Medtronic was guilty of anything pernicious. What I said was the predicament suggested the need for more caution where off-label use is concerned. And I’d maintain that if more than half your sales are for off-label use … well, to use a simile the lead-footed among us can appreciate, that’s like driving a red sports car in a town where the budget is also in the red and the police are bored. You just know you’re going to get pulled over.

Now, let’s talk about Johnny Law (a.k.a. DoJ). After four years of this, that and the other thing, DoJ now says it has closed the investigation. What does the department have to show for all this? Nothing. Zip. Squadoosh. No charges and no fines. Color me cynical, but I doubt we’ll hear attorney general Eric Holder say “oops!” or “hey, real sorry about that! Still buddies, right?”

Government never makes amends when it botches things horribly, which it does with the kind of reliability that makes Old Faithful seem like just another geyser. Still, one assumes shareholders might be hacked off at DoJ’s attorneys, whose fishing expedition could not have helped anyone’s retirement plan.

I’m not arguing in favor of being able to sue government, but sometimes it seems immunity gives government attorneys too long a leash. At any rate, score one for Medtronic, and here’s to playing blogger and legal beagle. These jobs actually do put food on the table, although there’s no accounting for how appetizing that food might be.

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