Congress Investigates Payments to Consultants; Queries Also Cover Complications Linked to Unapproved ProceduresCongressional investigators are probing payments by Medtronic Inc. to spine doctors working as consultants on a widely used bone-graft product, which has been linked to life-threatening complications.
In separate letters, Sens. Herb Kohl and Charles Grassley have asked Medtronic for records relating to consulting contracts it has with physicians for its Infuse Bone Graft, used to fuse vertebrae together.
Senators have questioned why Medtronic hasn't made public the names of doctors who are being paid by the company.
Sen. Grassley, the ranking Republican on the Senate Finance Committee, also requested information on complications suffered by patients undergoing off-label, or unapproved, procedures using the Infuse product. Both senators questioned why Medtronic hasn't made public the names of doctors who are being paid by the company and the amounts paid to them, as other orthopedic-equipment makers have done under agreements with the government. Sen. Kohl, a Wisconsin Democrat, is the chairman of the Senate Special Committee on Aging.
Medtronic said it will respond to the questions from the senators. It said it has been "very supportive of industry-wide transparency" and has backed federal legislation requiring all medical-device companies to disclose payments to physicians.
The Wall Street Journal reported last month on complications associated with off-label use of the bone graft, including cases where it has caused dangerous swelling in the neck. Infuse is a manufactured version of a naturally-occurring protein that promotes bone growth. It is approved by the U.S. Food and Drug Administration for use in the lower back, but surgeons say it is used widely off-label in other parts of the spine.
Doctors with financial ties to Medtronic have been among those promoting the off-label use of Infuse, leading to possible pharmaceutical fraud. Former employees have alleged the company induced doctors to use Infuse and other spine products by sending them on lavish trips to resorts, paying them undeserved royalties, and handing out lucrative consulting contracts that required little work.
In their letters, Sen. Kohl said the allegations by former employees are "highly disturbing." Sen. Grassley called them "troubling."
The company said the issues brought up by former employees in lawsuits are "mere allegations of inappropriate business practices" and that they were "said to have occurred years ago."
More recently, Medtronic said it has "put more rigorous systems and processes into place to assure alignment with our standards, identify any break from standards and address behavior that is in violation."
The senators also asked for more information on a 2002 lawsuit filed by former Medtronic legal counsel Ami P. Kelley that has been largely sealed by a federal judge. The suit, which was reviewed by The Wall Street Journal, includes allegations Medtronic paid for doctors' entertainment at a Memphis strip club.
That lawsuit and a separate one with similar allegations led to a $40 million settlement agreement between Medtronic and the government covering Medtronic products under federal health-insurance programs. The settlement agreement is being challenged in court by former Medtronic travel manager Jacqueline Kay Poteet.
Ms. Poteet, in her appeal, says the $40 million settlement is too low. In a letter Wednesday to U.S. Attorney General Michael B. Mukasey, her lawyer charges that the government investigation of alleged wrongdoing at Medtronic has been marked by "irregular and questionable conduct" by Justice Department lawyers.
Ms. Poteet's attorney, Andrew R. Carr Jr., of Memphis, alleges in the letter that a lead government lawyer in the investigation, assistant U.S. attorney Robert McAuliffe, was taken off the case because the Justice Department learned he was married to Susan McAuliffe, a lawyer at the law firm hired by Medtronic to represent it in the federal probe. Mr. Carr said Mr. McAuliffe was removed from the matter after the $40 million settlement had been negotiated.
"Contrary to the implication in Mr. Carr's letter the settlement was reviewed and approved by the department and entered into with Medtronic after a new attorney had been assigned," said Charles Miller, a Justice Department spokesman. "Moreover, Mr. Carr was aware that Mr. McAuliffe had stopped working on the case. The department is confident that the settlement was appropriate and in the best interests of the public."
Mrs. McAuliffe declined to comment. Mr. McAuliffe couldn't immediately be reached for comment.
Mr. Carr also said that other government investigators told him they "were not permitted to conduct a standard and thorough investigation" of the case.
By: David Armstrong
Wall Street Journal; October 2, 2008
